The world’s largest shipping line, Maersk, has launched a manifesto for the future that envisages a time when reliability becomes more important than low rates and it is as easy to book space on a ship online as it is to book a seat on an aircraft.
In its New Normal manifesto, the Danish shipping line claims that while customers, of course, care about cost, what they really care about is the total cost and not the price on a single container. Maersk believes that its customers value their ability to trust delivery promises more than they need a rock-bottom price because the cost implications of late deliveries are far greater. If they cannot rely on a container being at destination on time, their whole business operations are compromised.
Shipper forum The Shippers’ Voice responded by applauding Maersk for going public with its criticism of the industry and itself. The shipping firm has drawn a line in the sand and it must now change for the better or face an onslaught of criticism from customers, the wider industry and the media.
Another survey from International Freighting Weekly also backed the reliability/cost argument, with 58 per cent of readers - mainly freight forwarders and shippers - believe that reliability will be more important than cost this year.
It will be fascinating to see how this plays out in the coming months and more than ever, it underlines how important it is that fresh produce importers and exporters work with trusted and reliable freight forwarding partners.
Analysts are reporting that the threat of oversupply in container shipping remains as it’s expected that the number of vessel orders cancelled or delayed will revert to pre-recession levels following a dramatic increase in 2009-10.
Of the vessels on order towards the end of 2008 and due for delivery in 2009, only 57 per cent were actually delivered. This trend continued last year, with only 66 per cent of vessels due actually delivered. This decline is not expected to continue in 2011, with slippage levels estimated to be around five per cent - in line with historic levels - with virtually no cancellations since June 2010 as the market recovered.
All of this is expected to ensure that freight rates remain competitive and this has been borne out with container rates continuing to decline on key trade routes - despite some shipping lines trying to implement peak season and bunker adjustment factor surcharges.
The reality is that while volumes are picking up, the growth in demand is nowhere near the growth in available capacity and utilisation levels are still around 80 per cent, leading to other carriers slashing rates to get their under-utilised vessels back to the 90 per cent level.
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