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Small- and medium-sized vessels’ opportunity to profit may be near

Impractical spot bookings from big carriers expected to have cargo owners to go small

It is nothing new that prices were supremely high the last few months. Cargo owners had to deal with exorbitant rates if they want their goods to reach the retailers on time. Lately, the industry observed a shift in cargo owners’ preference.

Time for smaller vessels to step up
Industry observers heard big carriers have introduced a new policy on restricting some clientele from spot bookings with effect 1 January 2022. Essentially, spot bookings are laden with premiums to guarantee space onboard. However, if shipowners become extremely selective, they should be prepared to lose the business.

Sean Crook, Director of Sydney-based Neolink, said Maersk and its subsidiary Hamburg Süd had been pushing clients to online bookings and/or FAK (freight all kinds) rates. He stressed, “While that might not be great for big customers shipping 1,000 teu annually, ours moving 300-500 teus never had contract rates. In a lot of instances, we have found our named account contract (NAC) rates less reliable than the FAK spot rates.

“I often offered both options to customers and recommended they pay the premium to guarantee space and improve reliability. This is a big opportunity to win market share from the big multinationals as they will be losing work to us for not being transparent with their customers that FAK/spot rates are the better option.”

Crook cited one customer saw a significant improvement in delivered-in-full-on-time percentage, and a reduction in rolled cargo by moving away from contracts. “Our customer numbers increased by over 100 in the past 12 months, mainly from multinationals not being transparent about this issue. Why would the shipping lines want to continue to book containers on my NAC rates from China, when they can sell that same space at 2.5-times my rate?

“Maersk/Hamburg Süd are not refusing to deal with freight forwarders; just moving away from the NAC rates as the demand is so high. They can make more profit by shifting to FAK.” Marine Online is a good platform for cargo owners with a lower tonnage, and beneficial for shippers wanting to avoid costly loadings from big carriers.

Marine Online News Team
Please email us at marketing@marineonline.com to contact the author for this article.

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