sea-land-transport-logistics-services

Shipping lines expand landside logistics services (Image: Phaata)

 

Shipping lines tightening the container supply chain may lead to many independent forwarders "disappearing", which raises concerns of freight forwarders.

The latest warning about carriers' market dominance comes from the International Forwarders & Customs Brokers Association of Australia (IFCBAA), which says controlling their ocean freight capacity will squeeze out forwarders on the land side.

Stuart McFarlane, director of air and ocean freight forwarding at IFCBAA, said carriers are giving priority to ocean bookings to forwarders that agree to use their overland logistics.

“Previously, such services would generally be arranged by forwarders that own and operate road haulage vehicles or sub-contract to logistics providers of their choice.”

Indeed, The Loadstar reported it was suggested that shipping lines in Australia used such priority booking tactics to gain access to forwarder customer data for direct business. to shippers - however, both Hapag-Lloyd and Hamburg Süd deny this.

However, Mr. McFarlane claims this integrated business strategy pursued by some of the largest shipping lines puts them in direct competition with small and medium-sized independent forwarders (SMEs) in terms of landside logistics, warehousing and customs clearance.

“Currently, carriers have unprecedented market power and are uniquely positioned to leverage the demand for access to sea freight capacity to control pricing of land-based services. Carriers also generally own or lease the containers required to access the ocean carriage service,” he said.

“The concern of IFCBAA and its membership is that the way in which the carrier market is using its substantial market power could result in freight forwarders being unable to compete.”

And without independent forwarders, there would be “significantly reduced competition” in the market, with shippers dependent on a small group of global players.

“Effectively, many forwarders may disappear, and the relevant forwarding and logistics services will only be available to Australian shippers and receivers as ‘tied-in services’ available through carriers’ affiliated entities and a small number of multinational forwarders,” added Mr. McFarlane.

The IFCBAA said the shipping lines' conduct could be contrary to Australian competition and consumer act, and called on members to provide evidence to the competition commission.

This is the latest development in a long list of issues facing shipping lines since the pandemic began and demand for container shipping began to outstrip supply, prompting many shippers and forwarders to accuse. Their suppliers increased their freight rates dramatically, even as the quality of service plummeted.

For their part, shipping lines were quick to blame the severity of the global port congestion.

 

See more:

 

Source: Phaata.com (According to The Loadstar)

Phaata.com - The first global logistics marketplace in Vietnam

Where connecting Shippers & Forwarders fastest!