'Doomsday scenario' for forwarders just a post-Covid rate drop blip
The “disappointing results” in Transport Intelligence’s (Ti) Global Freight Forwarding Market Report are a consequence of ...
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Forwarders are focusing on building improved relationships with smaller container lines amid deteriorating relationships with the largest operators.
Speaking to The Loadstar, multiple forwarders said Covid-19 had “permanently” upended the balance of power between the two sides , with increasing digitalisation further eroding the possibility of seeing relationships improved.
“All carriers have moved to some form of online model, which further restricts the possibility for human interaction,” one UK-based SME told The Loadstar.
“And that relationship is never going to return to the pre-Covid status, with carriers having invested in additional ships, leaving them with the whip hand over the container market, especially considering the protections given to them to operate alliances.”
Recognising some benefits of the alliance system, the forwarders The Loadstar spoke to nonetheless said it unfairly disadvantaged them, and compromised the ideals of free trade.
Amid deteriorating relationships, the SME source pointed to an increasing focus on box ship operators with smaller fleets, as they were more receptive to the idea of reaching agreements with forwarders based on the long term.
Echoing the UK-based forwarder, another, operating out of Portugal, said availability, capacity and reliability were undoubtedly important, but “the most critical factor is maintaining a relationship grounded in mutual respect and professionalism”, and added that it was “essential” carriers were not allowed to bypass forwarders and engage directly with their customers.
Asked whether that meant they opposed moves by ocean lines into the airfreight sector, the Portuguese forwarder said it “wasn’t as simple as that”, and explained: “There’s potential for a positive impact if these carriers adhere to IATA standards and uphold established ethical norms. When done correctly, this expansion can bring advantages, such as enhanced multi-modal capabilities that offer comprehensive logistics solutions.
“Success in this new arena will likely depend on collaborating with forwarders to ensure regularity and consistency in service offerings.
“But if ocean carriers adopt aggressive competitive tactics similar to those that they deploy in shipping, directly challenging forwarders by circumventing established client relationships, they may face significant obstacles.”
Even so, the sense among many is liners moving into airfreight is part of a broader push by carriers to use pandemic-induced profits to establish a one-stop shop for shippers.
The forwarders told The Loadstar that, while this idea may appeal to the bigger shippers, the bulk of freight moved belonged to smaller shippers that have also expressed fears over the consolidation of the transport sector.
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