Index-linked agreements: 'shippers have to have the stomach for them'
Shippers pondering the pros and cons of index-linked agreements (ILAs) “have to have the stomach ...
© Xuejingwen
Container shipping must undergo digitisation and shift to upfront payments to climb out of its current groundhog day financial depression.
Speaking at TPM Asia in Shenzhen, Maersk Line global sales head Michael Hansen said digitisation could partly solve the current “vicious circle” of container supply outstripping demand and what he termed the “high cost of low prices”.
“None of us can live with the current state of affairs. Very low freight rates lead to very transactional behaviour both from us as carriers and equally our customers.”
He ...
Comment on this article
Dave
October 12, 2016 at 1:15 pmAt last someone with encouraging views…
Wasn’t any more hoping to read this before my retirement.
Impairment first, upfront payments and crystal transparency.
Big job but utmost imperative.
Martin Hedley
October 14, 2016 at 2:09 pmMany industries are going to have to forget the 30 – 60 – 90 day payment cycles. Try going to buy your groceries and asking to pay in 60 days. In the airline industry, all flights are 100% paid before flying. If the customer misses, or cancels, they pays for that ‘privilege’ but the airline is covered. If you ship your household goods by sea container for an assignment overseas, you can’t get it off your driveway until the entire trip is paid in full.
The trick is – that someone in the industry has to sneeze first and brave the (temporary) competitive pressure of the others allowing ‘terms’.