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ESC – European Shippers’ Council

Shippers take center stage at Intermodal Asia 2015

A delegation of the newly formed Global Shippers Association (GSA) presented the first ever Shippers’ Panel at an Intermodal Fair, at Intermodal Asia in Shanghai, placing shippers center stage.

The panel addressed the specific needs and requirements of shippers in international transport regarding service levels and pricing, especially in maritime and airfreight transport as well as trade facilitation issues. The panel consisted of Mr. Sunny Ho, executive director of the Hong Kong Shippers’ Council, Mr. Paiboon Ponsuwara, special advisor to the Thai National Shippers’ Council and Mr. Chaischan Chareonsuk, secretary general of the Thai National Shippers’ Council. Joost Sitskoorn, special envoy of the European Shippers’ Council chaired the panel.

Supply Chain
The discussion focused on the relation between shippers, the beginning and end of every supply chain, logistic service providers and transport companies like liners, airline and railway companies.

To the dismay of all these parties involved, talks between them generally boiled down to discussions about price. This is mostly due to the fact that contacts are usually between sales representatives, whose job it is to negotiate about price. A second reason, to some, was the perceived commoditization of transport, especially in maritime transport. When service differences are gradually chipped away from the equation, the only thing that remains to talk about is price.

The panel chose to explore to different ways of doing business.

Shippers are very much aware of the fact that margins are small in transport and profitability is at an all time low. Additionally they see a growing demand amongst shippers for better information on the whereabouts of the shipment, transparent and precise billing, information on shipping lanes and ports of call, punctuality. Services that shippers are in some cases willing to pay for.

The panel discussed a more sustainable pricing model especially on the topic of surcharges. Now dozens of indistinct surcharges usually amount to more than the naked transport price.

In airfreight now, you see the first airlines moving away from surcharges and present an all in price. Shippers are happy with these developments and hope the same can apply to maritime transport in the near future.

As an alternative the panel mentioned for liners to add a paragraph to their annual report on surcharges, clarifying about what was levied and how it was used.

Shippers encountered criticism on their habit of overbooking by 30% just to be sure they have enough capacity available. Also liners mentioned that shippers could be more transparent about their specific wishes regarding (extra) services. Shippers mentioned real time information on the whereabouts and arrival time of their shipment as one of their first priorities. Their distributing, marketing, promotional and sales activities depend on it. In this day and age with GPS and other information technology readily available, this shouldn’t be much of a problem. Most liners already have this information available, so it should be only a matter of making this accessible.

A yearly contact between sales people should give way to more frequent contacts on different levels about services. Shippers and liners agree that the valuation of the services delivered is usually determined by possibly the lowest paid workers: the truck driver of the shipper and the liners man in Panama. There is no connection between their experiences and performance and the contract negotiations between the sales reps.

The awards for best transport company and logistic service provider that are already in place in countries like Thailand and The Netherlands are helpful to create awareness about what is important to shippers. Shippers agreed that it would be worthwhile discussing best practices in the business with liners and freight forwarders. A suggestion similar to this was recently discussed with IATA. Shippers would like to do the same with the maritime industry and will employ a plan to do so.

Shippers also discussed IT as the next game changer in logistics. Single window initiatives, synchronized with port community systems are very important developments that should be given the utmost priority. Shippers hope that national and regional politics as well as customs and border management organizations can work towards global standardization.

With China accessing to the TIR Convention, shippers acknowledge the coming into being of a truly global international harmonized system of customs control that facilitates trade and transport whilst effectively protecting the revenue of each country through which goods are carried. The creation of trusted trade lanes without physical checks is a powerful instrument to boost international trade and the economy.

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This article was posted on March 25th, 2015 by Nik Delmeire under News