As shippers demand more information from carriers on the whereabouts of their containers in transit and better schedule reliability, they are becoming less interested in carriers’ complaints about rates and profitability. Shippers are also turning to forwarders and non-vessel-owning common carriers to provide the information they need on their supply chains.
“As the forwarders gain market share, the forum between shippers and carrier is looking more and more anachronistic,” said Ken Bloom, CEO of INTTRA, the e-commerce booking service. “Shippers are saying: ‘Thanks for telling me your problems, but I’m not that interested. I just want my containers to be shipped on a reliable basis and at a competitive cost.’”
Bloom, who observed the change in shipper-carrier relations at the JOC’s TPM Asia conference in Shenzhen, China in October, said shippers increasingly want to know which are the most reliable carriers on a given trade lane and what the price differential for a faster transit time may be. “Forwarders are gaining market share because they focus on answering those questions,” he said.
Another reason shippers are turning to forwarders to arrange for their container shipments is that forwarders can help them reduce supply chain costs. “A shipper might be better off shipping half a container every week, rather than one container every other week. If a forwarder can help me do that, that helps me smooth my supply chain and reduce my supply chain costs.”
The increasing importance of schedule reliability to shippers is becoming clear in the monthly performance reports published by INTTRA and SeaIntel Maritime Analysis, which show that a major carrier that used to rank far down the list in terms of reliability has made dramatic improvements in a short period of time.
Carriers, which have almost universally turned to slow-steaming their ships over the last few years, are finding that this practice also helps them improve schedule reliability. This, in turn helps them further reduce costs. Not only do they burn less fuel, but they also save money by not having to speed up or search for a new berth window if they are late.
“Slow-steaming has a negative effect by forcing shippers to increase inventories, but the positive effect is that it increases reliability,” Bloom said.