Shippers name their biggest challenges with carriers

Shippers have identified door-to-door reliability, capacity constraints and a lack of communication as some of the biggest challenges they face when dealing with shipping lines.

Speaking at Containerisation International’s Global Liner Conference, European Shipper Council (ESC) Maritime Transport Council member Marco Wiesehahn welcomed recent moves by carriers to improve service reliability from port to port.

“For us the top three challenges are capacity constraints, which are artificially created by carriers; varying transit times, where the given time is 30 days but it can move up and down by 10 days, which is awkward; and services changes where carriers inform you with just a couple of days’ notice that containers are going to be rolled or are somewhere else other than where they are required.”

"This causes a lot of operational issues. We find almost 30% of boxes do not arrive on time and that is something that we should try to look at and see if we can improve.”

Source: Lloyds List April 2013

Carriers 'welcome' to improve say freight forwarders

Freight forwarders are not concerned that shipping lines’ moves to improve service levels will result in the industry losing customers to carriers. Carrier moves to improve service and reliability levels would in fact benefit freight forwarders.

The better the job the lines do, the stronger the value proposition freight forwarders are able to bring to their customers. So we very much welcome these initiatives. Traditionally, one of the ways freight forwarders have differentiated their services from those of carriers is by offering a more personal and tailored service along with a range of value-added and bespoke IT solutions.

Since the 1980s, freight forwarders have increased their share of the overall container market from around 10% to around 40% today.

Source: Lloyds List April, 2013

Patrick to take delivery of four cranes

Port watchers at Fremantle will be able to witness container cranes being unloaded, when stevedore Patrick takes delivery of a new ship-to-shore crane.  According to Fremantle ports website, the operation of unloading the 104.5 metre crane would take several days after its expected arrival on May 12.

The crane is being shipped aboard the semi-submersible Hl Vessel Zhen Hua 26 along with three other cranes bound for Melbourne and Brisbane.

After Fremantle, another crane would be unloaded at Brisbane on May 24 if all goes to plan.

The final two Shanghai Zhenhua Heavy Industries Company (ZPMC)-manufactured machines would arrive in Melbourne at the end of this month.

The cranes, commissioned by Patrick parent company Asciano, were built to handle higher container capacities and improve productivity at the three terminals according to a statement by Asciano.

After testing, the cranes would be handed over formally.

Full operational capability is expected by the end of June for Brisbane and Fremantle, and early August for Melbourne.

The new ZPMC cranes are capable of undertaking up to 200,000 lifts per annum, which is a 10% to 20% improvement in productivity when compared to the older cranes being replaced.

Source: Lloyds List May 2013

Asia-Europe trade faces fresh disruption

Shippers should prepare themselves for sudden service changes and the blanking of sailings in the next few weeks as rates continue to sharply decline and carriers are forced to take action, according to SeaIntel Maritime Analysis chief executive Lars Jensen.

Speaking in London at Containerisation International’s Global Liner Conference, Mr Jensen said that oversupply of capacity had resulted in spot rates on services from Asia to Europe declining. The declines had worsened of late and rates had dropped.

Mr Jensen said prices would drop to below breakeven point for carriers within the next six weeks, at which point carriers would be forced to remove capacity in order to drive up prices.

Mr Jensen said: “As a shipper you cannot rely on the carriers’ network any more as they will have to act and they will act by blanking sailings and pulling out capacity.

"You cannot sit back and say, ‘This is the network for the next year’ and plan your supply chain accordingly. That is not going to happen.”

Mr Jensen added that recent carrier attempts to increase spot prices without removing tonnage through the implementation of general rate increases had failed, which is why shipping lines would need to turn to service adjustments.

Source: Lloyds List April, 2013

Hong Kong strikes and impacts on Australian trade

The Hong Kong strikes are having a significant impact on Australian importers.

The Hong Kong Association of Freight Forwarding and Logistics estimates that 120,000 twenty-foot equivalent units (teu) have been affected by the strikes at the Kwai Chung container terminal.

This has had a significant impact on Australian importers, further compounded by recent variations in shipping line schedules ex-China, which has resulted in an increase in utilisation of trans-shipments from Chinese ports via Hong Kong.

The following commentary has been provided by John Law, FTA compliance and litigation counsel.

"What many people find hard to understand is that shipping had been regarded as "an adventure" for centuries and centuries, with the perils of the sea and potential damage to vessels and cargo being the subject of general average and other terms and conditions to protect the ship owners' rights and investment in property.

"Many people hold the view that shipping companies, banks and insurers never lose. While this may not be true, terms and conditions have evolved for these three limbs of commerce which can protect them when the unexpected happens.

"As far as shipping companies go, a major typhoon or cyclone which interrupts the passage of a vessel is not any more the fault of the shipping company than the current strike in Hong Kong.

"All these events are outside their control and neither the shipping company nor the freight forwarders who have cargo on the vessel can be held responsible for any commercial damages that flow from such "misadventures".

"The modern world seems to think that everything is predictable and controllable and in the era of "just in time" logistics management, inconveniences caused to direct shipments and trans-shipment cargo puts strains on business relationships and profitability throughout the supply chain.

"Explaining all of this to people who expect their cargo will be here on time to fulfil orders must be a nightmare for shipping companies and freight forwarders, with the financial cost of using air freight to move goods being prohibitive in many cases.

"They occur irregularly and infrequently when a fairly predictable system becomes corrupted, so the expense of insurance (if such insurance was available), may not be worth the investment over time."

Source: Lloyds List April, 2013

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