BLUE STAR HIRES AGENCY DROPPED BY ANZDL

BLUE STAR HIRES AGENCY DROPPED BY ANZDL

Two conflicting operating philosophies have emerged in the highly competitive ocean shipping trade between the United States and Australia/New Zealand.

Australia-New Zealand Direct Line is ending its relationship with Southern Steamship Inc., a subsidiary of Inchcape PLC of London, to do its agency work itself.In contrast, competitor Blue Star Pace Line Ltd. is turning its backroom documentation and information services over to Southern Steamship.

By eliminating approximately 100 of its 250 positions in North America and giving its agency work to Southern Steamship, Blue Star Pace is getting back to the basics of vessel operating and customer service.

Ray B. Tilley, Blue Star's president, said in a telephone interview from New York Tuesday that the move will free its staff to concentrate on "the nub of the business": booking, sales, marketing and customer service.

"It gives our managers more time to manage," Mr. Tilley said.

Conversely, Australia-New Zealand Direct Line executives said they can maintain better control of operations by taking their agency functions inside the company. Alex Knowles, the company's executive vice president here, said the line will improve customer service while centralizing operations within the company.

"It's a win-win situation," he said.

Shipper customers noted that Australia-New Zealand Direct Line move will increase its costs, and the company indeed has increased its staff by about 45, to 125 employees in North America. Yet Mr. Knowles said automation will

allow the line to take on added functions and still save money, when former agency fees are factored in.

"Only by automation can this be done," he said.

H.W. Thurber, president and chief executive officer of Inchcape's North American services in Mobile, Ala., and chairman of Southern Steamship, believes the trend in the shipping industry is toward reliance upon steamship agencies.

He noted that Southern Steamship in the past 18 months has taken on as customers Atlantic Container Line, Senator Linie and Cho Yang Line. Agency services work best, he added, when the relationship is transparent, and the best way to achieve transparency is for the agent to hire staff with liner company experience.

Mr. Thurber said Southern Steam intends to hire a number of the former Blue Star Pace employees.

Shippers say the changes at Blue Star Pace and Australia-New Zealand Direct Line will not affect the competitive position of the two carriers. Those carriers, with Columbus Line, control about 75 percent of the cargo in the trade.

"For the customer, the agency operation works, but so does the other," said Charles Brennan, president of Brennan International, a Southern California cargo consolidator.

Another cargo consolidator, however, said if Southern Steamship is to provide a transparent service for Blue Star Pace, it must improve its handling of documentation. Mr. Thurber adamantly denied Southern Steamship has been sloppy in this area.

"Southern Steam was not doing a good job on documentation with ANZDL," said Gary Murdoch-Brown, general manager of ISS Express Lines Inc., in Long Beach. He said Southern Steam often submitted incorrectly rated bills of lading, sometimes three or four times on the same document.

He accused the company of submitting late documentation on inbound shipments and incorrect documentation on outbound shipments.

"I gave a word of warning to my friends at Blue Star. Maybe they can work things out with Southern Steam. If they do, I'll eat crow and admit I was wrong," Mr. Murdoch-Brown said.

Mr. Thurber said the facts do not bear out those charges. He said Southern Steam consistently registered 98 percent to 99 percent accuracy and on-time performance on Australia-New Zealand Direct Line own quality control rating system.