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Today's Feature


Reducing the stress of overbooking


ONE of the most stressful issues for lines and shippers alike, year after year, is the overbooking of space on vessels.

Shippers often feel short-changed by carriers because they feel they can’t get the space they need at times deemed crucial for their business.

Carriers, meanwhile, remark they can’t accurately forecast ship loads, which leads to problems with equipment and space. This further aggravates a difficult situation.

Figuring out a way to handle booking shortfalls would benefit both shippers and carriers. Lines would be better able to respond to the bookings of customers that really want to ship goods on a particular voyage. 

Overbooking is especially rampant for shipments out of China - which accounts for over a third of containers carried in global transport - during the increasingly longer peak season on the major trunk routes to Europe and the US.

But the effects of overbooking are felt everywhere as shortages or surpluses of space on vessels to and from China are felt on services that are linked to them all over the world.

This puts an impossible burden on carriers because if they accept all these extra bookings they don’t know which ones are real and which ones are fake.

A managing director of a large forwarder recently told us that the way the industry currently deals with overbooking creates tension for all. It’s an inefficiency that exists and, according to him, until now nobody has wanted to, or was able to, tackle it.

An executive at a major carrier said that a 30 per cent shortfall on a ship would not be considered extraordinary.

So, in order to hedge the forecast against the actual demand, he explained the company would book the ship as if it were 130 per cent full.

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