News / Lack of respect will dash carrier hopes of forwarding success

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Shippers remain sceptical over the long-term future of ocean liners’ foray into freight forwarding, questioning their willingness to accept terms and conditions that level the playing field.

James Hookham, director of the Global Shippers Forum (GSF), told The Loadstar carriers had entered the space with a “level of respect for their customers missing”.

“If you look at the terms and conditions (T&Cs) carriers offer their customers, they are very much tilted in the carriers’ favour, based around broadly defined circumstances contained within the small print,” Mr Hookham said.

“And, from their point of view, it is a masterful play, as it allows them, when the sun goes behind the clouds, to point to them and talk about surcharges.”

For shippers, the past five years of behaviour by carriers, which he says has been “encapsulated by a rhetoric of surcharges” and what carriers can extract from their customers in times of difficulty, has generated a lot of “ill-feeling”.

And this ill-feeling, Mr Hookham believes, will leave carriers struggling to make any sort of success out of their forwarding activities.

“Weakly drawn-up contracts and carriers exercising their rights under bills of lading will be an impediment, should they carry this attitude into diversified areas like forwarding, because shippers get far friendlier agreements from traditional forwarders,” he added.

“This creates an issue where carriers could be required to create an alternative system; for instance, one in which T&Cs differ as goods move through the supply chain.”

Asked if he considered such an option likely, Mr Hookham bluntly responded “no”, but said it presented an opportunity for shippers and carriers to have a “new type of conversation” – a message the GSF has been pushing since the pandemic.

Citing the volatility surrounding global supply chains, Mr Hookham asked why shippers would tie themselves further into the unfavourable contract arrangements carriers offered.

Instead, he said, shippers were looking for a situation where traditional arrangements with carriers, predicated on a “very transactional approach”, were replaced with something that was more long-term and relational.

Acknowledging that “this may be a very short conversation”, he said carrier refusal to redress the imbalance would hinder further development of their forwarding activities.