- Ocean carriers are being accused of “arm-twisting” to coerce shippers to purchase extra products, such as customs clearance and insurance to increase their prospects of shipment.
- The situation is desperate for many smaller shippers and now, indeed, smaller agents. The ball’s rolling and it’s going to be difficult to stop.
A recent news article published in The Loadstar states that shipper arms being twisted, as carriers use ‘carrot’ of shipment to sell add-ons.
Allegations against the container lines
The latest allegations against the container lines come just weeks after accusations emerged of carriers “welching” on newly signed contracts to target more lucrative premium business, and just ahead of the Q2 reporting season, when it is anticipated carriers will be posting massive profits.
Indeed, maritime consultant Drewry last week said it “would not be surprised” if the liner industry achieved a cumulative net profit of $100bn for this year.
“Carriers’ only account in deficit is public relations,” it added.
Equipment and space remain a challenge
Rates will remain high as both equipment and space remain a challenge on all markets.
In order to serve our customers better and offer a truly end-to-end solution, we are therefore concentrating our efforts on carrying business which offers the best revenue/value potential.
“This means we will focus our main priority on shipments offering us pre-carriage, customs brokerage, on-carriage and our new cargo protection cover.” adds the Maersk subsidiary.
Add on products forced upon
The message went on to imply that without buying these add on products, shippers would struggle to get their cargo booked – and still stopped short of offering a guarantee of shipment even if the customer was prepared to purchase its additional services.
“Customers offering this potential should find that the likelihood of bookings being accepted should increase – there can be no promises, but we will prioritise cargo which has most reward,” it said.
Strategy not in paper
Hamburg Süd is far from alone in using the carrot of acceptance of bookings to push extra products, although few are prepared to put this strategy into print.
I’m certain this is the talk in carrier boardrooms at the moment, how to squeeze even more money out of their customers, but we are mostly hearing this off the record from the reps, with a ‘nod and a wink’.
The MD of a large UK freight forwarder told The Loadstar today carriers were “on a roll”, maximising revenue from their extra services.
Complete supply chain aspect
Now the lines are increasing their interest in those clients [to which] they can push the complete supply chain aspect, encompassing clearances, warehousing and local/nationwide on-carriage.
In some respects, they would claim that they have always done it (albeit quietly). Now they see this as a lucrative add-on, and being able to offer it coupled with the lure of getting space will attract many.
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Source: The Loadstar
