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By Alex Lennane
“Thousands” of small freight forwarders fear for their survival following Maersk’s decision to offer them only its Maersk Spot product.
The loss of the vast majority of Maersk’s capacity has led to some “4m teu looking for a new home”, according to one major forwarder.
Larger forwarders have secured long-term contracts with other lines, but smaller forwarders are unable to follow suit.
“The common problems for forwarders are space and rates,” said one European company. “The most important is space. The other shipping lines have released capacity to the big players at very cheap rates and guaranteed space.
“With Maersk, you can get spot rates only, which means you cannot plan a shipment, and we small players can never find a space with Maersk.
“The spot quote has a very short validity, it can expire on the same day if Maersk runs out of space, and it is not valid on the next vessel. How can we work in a such way?
“It means I have to quote with a different shipping line with a different service and, just in case I get the shipment, I have to check Maersk’s spot quotes to see if they are cheaper and switch the booking to them.
“Maersk uses small freight forwarders just to fill their empty space. This doesn’t permit small companies to survive in this business.”
One medium-sized forwarder, who has secured capacity with other lines, explained: “With Spot, you have to decide there and then. There is no rate stability, even in the short term. Is it sellable to clients? Not really.
“The rate may or may not work, it’s very transactional. I wouldn’t go to a client to sell that service. I can see why some forwarders are finding it difficult.”
He said he had a great deal of sympathy for small forwarders.
“We don’t want anyone to go bust. There’s more than enough room for all of us. It must be very difficult in some cases.”
He added that the decision was “Maersk’s prerogative”, but “it came out of the blue at a very difficult time. It was the worst time they could have done it”.
Another independent forwarder added: “It’s a very difficult period for our future. Fortunately, we decided to reduce our market with Maersk, but it is utopia to think that we won’t need Maersk anymore. We need it much more than it needs us.
“This situation for sure will create disruption in the market, because the game’s rules are changing and there will be a new natural selection in our industry.
“We should think of how to join forces and resources to deal with the situation. The year will be very difficult to survive.”
One forwarder called for regulatory authorities to step in, saying it “shouldn’t be possible to cut the space from the small players like us”, arguing he was offering an “essential service”.
He added: “The small and medium freight forwarders have a dark future.”
Comment on this article
Elton Tan
January 20, 2022 at 1:19 amI find all this dark and gloomy predicitions about the death of smaller freight forwarders because of Maersk action is very negative.
My company haven’t not been booking with Maersk on a regular basis as we have other liners to choose from. Rates is important but end of the day, we are all providing a service as a whole package. Freight is part of that service.
I believe there is always a light at the end of the tunnel for such pre-emptive move by Maersk to ‘kill’ smaller freight forwarders off.
Innovate and be more precise in your service delivery, that is the only way you can move forward. While my dislike grows for giant liners like Maersk and CMA, I still believe there is room for growth for smaller freight forwarders.
Good luck to all my fellow freight forwarder industry players, Stay strong and you shall be able to pull through. Men or Mankind have always found a way to survive when forced into a corner. Today might be the liners day.. the tables will turn and when it turns, the freight forwarders will comeback.
ECCO-FREIGHT TRANSPORT SERVICES B86916517
January 20, 2022 at 12:46 pmThanking Mr Elton Tan for sharing his vission -and specially “get the gears up & straight” on this touchy matter of concern, just want/couldn’t refrain to complement him by highlighting what we (“a small F.FWDR”) had focused on & work hard to make sure we are premanently + positively delivering to our Customers: Know-How, Dedicated Service, Innovative Solutions and ADDED VALUE as the strongest ARMOR we could have to stand and grow in the market -any market, against externals actions & policies fm the myriad of operators we daily have to wrangler. We decided very early on our venue that neither Carriers strategies+interests nor Freight Rates could ever become a matter of feasibility for our projects and plans. It has worked well for us this far and is proving again right on present enviroment. Sorry for extending as I simply wanted to to say that we “small Forwarders” should be clear and confident on our key contribution to freight and logistics for our Customers. Still, what we should be united in is on asking relevant governement & supra-national authorities to do their supervising regulatory job -what is flagantry missing for quite a long time.
Heinz Tepe
January 20, 2022 at 2:50 pmAnd Messrs. Damco?
Are they forced to use “Maersk Spot” too?
On one hand is it difficult for smaller LSPs to work with Maersk for some time, and on the other hand is this trend a threat, particularly if adopted by other carriers like Hapag/Kühne+Nagel, CMA-CGM/Ceva.
Gerardo Hernandez
January 20, 2022 at 5:41 pmWith few shipping lines doing whatever they want with the rates (oligopoly), I see an open invitation for competition, we need new shipping lines, good for some big forwarders who chart their vessels and also some major shippers did the same, so Maersk should reflect that for every action is a reaction, they are not alone in the world…. I personally see that the war (and love and hate relationship) of shipping lines is with big FF, not with small FF, maybe I am wrong, but we might be now a collateral damage, if shipping lines are smart they should help small and medium FF in order to be protected against big FF in this war of titans, where big FF need more small shipping lines and big shipping line should appreciate and need more small and medium FF, that is the logical strategic direction, let{s see…. By the way I own a FF company of 35 people and so far feel that my company still have a future
Paul Kata
January 23, 2022 at 11:05 amQuite interesting times!