ISSUE 4 2011


NEWS


5


Container shipping needs a major rethink, says Maersk line boss


The container shipping industry must radically change the way it runs its business, the head of Maersk Line told the TOC conference in Antwerp on 7 June. It needs to radically rethink its approach to customer service, argued CEO, Eivind Kolding.


transparency.


In his presentation to the conference, and in manifesto


Normal’


‘The New published


by Maersk, Kolding said that the industry is in danger of being complacent. As in many sectors before it, such as car making, aviation or mobile phones,


there was a danger In a remarkably frank discourse


on the industry’s shortcomings, he said that all too often, the industry fails to deliver what it promised, with one in every two containers arriving late, complex business processes and a lack of


that established companies could be wrong-footed by new technology or new ways of doing business. He warned that it was important for established liner shipping operators companies to recognise that the possibility of a newcomer coming along with radically new ideas and approaches to customer service – just as the low-cost air carries did in aviation a few years ago. Kolding said: “What if we could guarantee that cargo would be on time, every time?


What if placing a shipping order was as easy as buying an airline ticket? What if the shipping industry was known for beating environmental expectations - not struggling to meet them?” Kolding suggested that


area in which the industry has made only half-hearted efforts so far.


a


95% – or even higher – on-time delivery performance could be achieved. There was a new generation of customers that expected better service from its suppliers and price was not necessarily the over- riding factor for them. Reliability, money-back guarantees, rapid notifications


of Often, delays the and


ease of business were equally important.


knock-


on costs of a container being delivered late far outweighs the actual freight rate.


He also urged the container industry to make more effort to embrace online bookings – an


Booking a container onto a ship was not fundamentally more complex than a buying a seat on an aircraft. It should be possible for customers to look up a price and schedule and get instant information on whether space is available, as well as track incoming cargo - and receive notifications if cargo is delayed. Documentation could also be trimmed and customers should also be able to make instant payment at the point of booking, over the web, if required. The shipping industry itself would also benefit through having better control of bookings and less no-show cargo. The European Shippers’ Council (ESC) said that it agreed with Kolding’s comments and


that its manifesto chimed well with it own view that the liner shipping industry needs to find, with its customers, new business models. ESC’s Maritime Transport Council Chairman, Jean-Louis Cambon, said


that the sector


“requires nothing less than a radical change of mind in container shipping, including recognition that price was not necessarily the primary and exclusive concern of clients.” It also needed to recognise that “a satisfied customer base is a far better tool to ensure long-term steady vessel


utilisation pricing flexibility.”


Secretary General for the ESC, Nicolette van der Jagt, added, though: “But Mr Kolding faces a heavy legacy to try and overcome. Schedule reliability has been getting worse in recent


than


years, slow steaming has been introduced without discussion with customers and extended lead times have caused real problems for many shippers. Also the consequential equipment shortages and changes in services, often without warning, and often at times of rising demand have created difficult conditions for shippers and consignees. “It will not be surprising that many shippers have become cynical about the true intentions of the liner shipping operators when they speak of improving customer service and reliability. Maersk will no-doubt bear the brunt of this cynicism from many shippers as it finally espouses the sentiments shippers have been crying out for decades. But can they practice what they preach?”


(See Shippers’ Voice, page 14)


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