Abandoning your crew is an awful thing to do. Yet around the world there are frequent cases. This year has been one of the worst. The usual motivation is a cash shortage, or bankruptcy.
Most ships are incorporated as separate companies. That allows the owner to declare bankruptcy of the ship without jeopardizing his wealth. But guess who is paying the seamens’ wages? The ship. It’s too easy.
The International Transport Workers’ Federation (ITF) has been working hard for seafarers for many years. They count the number of seafarers whose wages go unpaid for more than two months. That’s the definition of abandonment of the seafarers.
Maritime is a wild world; seafarers deserve fair treatment, and it’s useful that some group is trying to look out for them.
The thesis of this article is that mergers have created two tiers of ocean container lines. The upper tier is contract-focused and the lower tier is focused on the short-term and spot markets.
According to the analyst from Alphaliner, a data source specializing in ocean transport, the top ten carriers operate 21.8 million TEU of shipping, while the lines ranked 11 through 30 have only 3.2 million TEU.
The top ten carriers increased profits by 1000 to 6000 percent over the last two years. The smaller ones only increased between 100 and 700 percent. Those are definitely two tiers of profit.
I would have preferred an analysis based on Pareto charts. The 80-20 rule is a good way of classifying such data.
But where is the connection between the contract carriers and the spot carriers? Is it correct that the large liner firms are predominantly contract-based and the small ones are spot-based? The result are based on Alphaliner’s survey, so possibly some of the questions dealt with this.
However, we have heard a lot recently about Maersk actively courting the spot market business with their website and the offer of end-to-end service. They are one of the big liner firms, and you would think from the article that they would be contract-based.
I have also heard of dedicated fleets of container ships serving for specific large shippers, such as Walmart and Home Depot and Costco. These lines have small TEU capacity, are not really common carriers that have to take any freight (though some offer their cargo space to others on a spot basis), but certainly are basically contracted for.
I guess you have to see the report in full to get the contract vs. spot connection.
One of the big hassles in container shipping right now is the unfair treatment of drayage drivers. They are often forced to wait because of inadequate capacity at ports. And this is directly traceable to the advent of large ships, which take longer to unload and which result in large numbers of empty containers cluttering up ports. When there are too many containers, the port operations are delayed and cannot be efficient, so often the terminals close their doors to returning containers. They are usually empty.
Then we compound it with the fact that it’s not that useful for the ocean carrier to pick them up for return to an exporting location. It’s almost easier to build a new one in China, say for the next load. Also, an empty container takes up a slot on the ship that could be used for paying cargo. Remember that ocean routes are closed loops with pickups and deliveries along the way. Each stop presents a new version of a loading problem to be solved.
The FMC will look at whether the ocean carriers need to reimburse other supply chain participants for any delays suffered when they can’t return the containers on time. And the carriers have to be more diligent about picking up empties. That’s something the FMC should be able to influence. The carriers will squeal. But they have to start cleaning up their leftovers.
Supply Chain and Logistics 