Do the alliance (re)shuffle – pricing vs schedules
Putting the key question
© Flynt
Consolidation in container shipping is eroding shippers’ trust in the sector.
There are calls for carriers to improve transparency in their dealings with customers.
MDS Transmodal chairman Mike Garratt told delegates at Intermodal Europe in Rotterdam this week that work was needed to rebuild bridges between container ...
Comment on this article
Gary Ferrulli
November 09, 2018 at 2:53 pmThe container carrier industry reflects one that has a 3% rate of return for over 4 decades. Thus the consolidations, alliances, joint services. The adage you get what you pay for couldn’t be truer. Cargo interests get low rates and mediocre services.
And the complaints are poor service and screams when carrier try to raise rates.
The two are directly connected. Carriers may not be the most customer friendly, although the low rates seems to be a part of the equation; and shippers are partially responsible for the poor services, they won’t pay for them.
Andy Lane
November 10, 2018 at 2:29 pmJust about spot-on. The shippers did not (per se) drive the price down, but they did benefit from it – since 2008. The Lines entered the race to the bottom, that race continues. It has distracted them from improving service quality, which is just what it is. The focus has been elsewhere. There is no place for the EasyJet or RyanAir, because the top 10 already do that. What is really required is SIA Business Class – but who will stump-up and pay the premium?
Gary Ferrulli
November 11, 2018 at 3:08 pmGreat point Andy. The rate of return etc is virtually all self inflicted wounds by
carriers. History is repetitive on that. A lot of it to do with the fact that many in the past and a few today are heavily subsidized by their governments. Those governments who got out of subsidies (US, Latin America, Middle East, Europe,
Australasia) the carriers are gone. You have 4 Europeans, one of which still gets some governments help, and the Koreans, Chinese, Taiwanese and Japanese who get significant amounts(Billions in the case of China and Korea). Many will say “so what?”, what profit motive do they have? Or are they national security blankets for local manufacturers and other business interests while also employing tens or hundreds of thousands. They say all politics is local, this is great example.
But the point is that until the commercial carriers make enough profit to improve services, they won’t. And the fuel price issue is perfect example, all know what has happened to it and what Jan. 2020 will bring. But nothing but complaints by shippers about recovering those significant additional costs.
YM
November 11, 2018 at 12:26 pmrecall when EU abolished the liner conference citing it will encourage competiveness; see what happens now