Maersk Space Ban, Dark Future for Small Freight Forwarders

• Thousands of small freight forwarders fear for their survival following Maersk’s decision to offer them only its Maersk Spot product.
• The loss of the vast majority of Maersk’s capacity has led to some 4m teu looking for a new home, according to one major forwarder.
• Larger forwarders have secured long-term contracts with other lines, but smaller forwarders are unable to follow suit.

A recent news article published in the Loadstar by Alex Lennane states that Maersk space ban means ‘a dark future’, maybe the end, for small forwarders.

Forwarders are space and rates

“The common problems for forwarders are space and rates,” said one European company. “The most important is space. The other shipping lines have released capacity to the big players at very cheap rates and guaranteed space.

“With Maersk, you can get spot rates only, which means you cannot plan a shipment, and we small players can never find a space with Maersk.

“The spot quote has a very short validity, it can expire on the same day if Maersk runs out of space, and it is not valid on the next vessel. How can we work in a such way? 

“It means I have to quote with a different shipping line with a different service and, just in case I get the shipment, I have to check Maersk’s spot quotes to see if they are cheaper and switch the booking to them.

“Maersk uses small freight forwarders just to fill their empty space. This doesn’t permit small companies to survive in this business.”

Sympathy for small forwarders

One medium-sized forwarder, who has secured capacity with other lines, explained: “With Spot, you have to decide there and then. There is no rate stability, even in the short term. Is it sellable to clients? Not really.

“The rate may or may not work, it’s very transactional. I wouldn’t go to a client to sell that service. I can see why some forwarders are finding it difficult.”

He said he had a great deal of sympathy for small forwarders.

“We don’t want anyone to go bust. There’s more than enough room for all of us. It must be very difficult in some cases.”

Maersk’s prerogative

He added that the decision was “Maersk’s prerogative”, but “it came out of the blue at a very difficult time. It was the worst time they could have done it”.

Another independent forwarder added: “It’s a very difficult period for our future. Fortunately, we decided to reduce our market with Maersk, but it is utopia to think that we won’t need Maersk anymore. We need it much more than it needs us.

“This situation for sure will create disruption in the market, because the game’s rules are changing and there will be a new natural selection in our industry. 

“We should think of how to join forces and resources to deal with the situation. The year will be very difficult to survive.”

One forwarder called for regulatory authorities to step in, saying it “shouldn’t be possible to cut the space from the small players like us”, arguing he was offering an “essential service”.

He added: “The small and medium freight forwarders have a dark future.”

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