Shippers and the carriers on the transpacific have been at each other’s throats for as long as we can remember, but this year is different.
This year, shippers are furious and it is easy to see why. They have been struggling to deal with constant freight rate hikes, peak season surcharges, bunker surcharges, emergency bunker surcharges, emergency revenue charges, cargo being rolled because capacity has been laid up and slow steaming that adds days to transit times.
With annual freight rate contract negotiations about to start, there are bound to be some heated exchanges across the table.
A taste of what is to come was found at the Trans Pacific Maritime conference in Long Beach this week.
A scathing review of carrier practices by Electrolux vice-president of global freight and logistics Bjorn Vang Jensen prompted a furious response from the world’s number two line, MSC.
“I don’t think you know what you are talking about,” said MSC’s Caroline Becquart.
“Shipping lines are doing a great job. Shipping is a simple process – it is all about supply and demand, and I don’t think you know anything about shipping.
“You need to have more respect. Apply for a job with us, because it appears you are brilliant at it.”
The audience loved it, and coming from a shipping company that takes a Howard Hughes approach to the media made it that much more rewarding.
But it was refreshing to see a carrier come out swinging in public, and while Vang Jensen remained unimpressed, it may have earned MSC a few more customers.
APL’s Robert Sappio took a less direct approach to Vang Jensen’s criticisms. He said the system was broken and the industry needed more predictability of cargo volumes, freight rates and services.
That the system is broken is beyond doubt. It is time to review the annual contract negotiations and maybe scrap that system altogether.
With all the surcharges and add-ons the lines call for every week, negotiating an annual freight rate seems pointless and a waste of everyone’s time.