Wednesday, March 23, 2016

Shipper complaints is music to my ears

Ten years ago, shippers and the European Commission killed liner shipping conferences: a low cost, self-regulating price mechanism, offering shippers stable tariffs and service quality. 

In the “Erasmus Report” (freely downloadable from my ResearchGate profile), for one more time as a heretic amongst my colleagues, I had warned them that this would lead to greater carrier consolidation (4 alliances today control world container trades) and service unreliability. They didn’t listen, and came to Brussels dressed to kill.

The excellent McKinsey Report (where the invisible hand of my old friend Ron Widdows, at that time boss of APL, is present throughout the text) highlights the issues at hand to the fullest, particularly on the aspect of service quality: A quality carrier, at that time, had a global sales-force which, for some, was representing 25% of their running costs, if not more. He was texting his consignee 4 times a day with the whereabouts of his container. Today, in the carriers’ cost-cutting strife, this has dropped to zero. “There is no one to talk to”; complained one shipper. 

Well, you should have known better my friend. But there is never too late. You have saved more than enough from the industry’s rock bottom tariffs. And if you now want higher quality; predictability; traceability; lower inventory- and supply chain costs, like in the past, I am afraid you will have to put your hand deeper in your pocket…

H Haralambides 

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