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Today's Feature

 

Carriers and shippers must hurt before real change takes place

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CONFERENCE after conference, seminar after seminar, year after year, we hear shipping lines and shippers complain about the same things—rate volatility, poor service levels, inaccurate booking forecasts, intentional overbooking of space, cargo shut outs, no shows and the list goes on.

Over the years The Container Shipping Manager has spoken with many a shipper and many senior liner executives and all of them agree, something must be done to address the aforementioned problems.

But what is ever really done about it? Sure, there is a lot of talk about the need for change, and it is very likely that there are a lot of good intentions behind these statements. However, at the end of the day, nothing has changed.

We are still hearing the same complaints.

For one logistics director with a major global shipper that we spoke to recently, he said, that in spite of this verbal commitment to change, neither side is willing to hurt themselves in order to achieve it. For him that is where the heart of the problem lies.

"First of all, we must accept that the problem in the relationship between shipping lines and their customers is incredibly complicated. And in the debate between shippers and carriers, there are excellent points that are being made on both sides, and there are terrible points made as well. Until we can accept this, then we cannot move forward,” he said.

The logistics director noted that at times both shippers and carriers take particular stances simply because that is the stance that their “team” is supposed to take. 

It is time to break this cycle, he said.

In other words, the industry needs to stop dancing around the problem and get down to the task of doing business in an effective and efficient way, even if it hurts.

The executive said that shippers must be willing to accept the full penalty of failing to deliver on their cargo booking commitments. If they do not show up on time as promised with their cargo, then they would still need to pay the full price as if the cargo had been loaded onto the ship. Equally, shipping lines will need to commit to delivering on their promises to load on the appointed ship at the appointed time.

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