In December, Drewry published on their blog this article describing four significant disruptions likely to happen to shipping in 2022.
I feel these are right on target for the business, and will affect international shippers of all sizes, and intermediaries, such as brokers and freight forwarders.
I’m especially concerned with disruption in the resale of blocks of container space. Drewry’s discussion of MQCs (Minimum Quantity Commitments) indicates that contracts being tried out will require the MQC to be evenly spread across the year. This will be very hard for most forwarders to meet. While some of the business is of the level-quantity, just-in-time sort, lots of other shippers have seasonal blips in their demand. Those seasonal demands cannot be supported by regular fixed-quantity shipments; inventory costs would balloon, jeopardizing the business.
I’m using the word ‘seasonal’ in a time-series sense, not a climate sense; there is a lot of business that experiences ups and downs in demand, not related to weather, but to the needs of their customers. Clothing retail offers an example; summer wardrobes need to be brought in in early spring; winter clothes in late summer. Christmas tree lights and trees themselves are only needed in September-October to be ready for the Thanksgiving to Christmas buying period.
Smaller brokers and forwarders usually exist because they can provide special services to smaller shippers. They need to get access to space in order to help these shippers. Having to purchase on the spot market exclusively will mean that many small shippers will be handicapped.
But we cannot expect the brokers and forwarders to provide inventory consolidation services for the shippers who have these seasonal needs.
I recommend reading the brief article provided.
Drewry – Browse Recent Opinion Articles – New disruptions to supply chains in 2022 and how international shippers can respond
Apparently I’m not the only one who thinks Maersk is staking out a monopoly position, discriminating against forwarders.
I think Maersk and others are in danger of killing off forwarders, and also customers. Larger customers will look at private transport. Small customers will mistrust Maersk’s platform, and evaluate its performance against the others out there, such as DP World’s. So it better work lots better than the others, not likely an advantage that can be sustained for long, nor for every type of customer. Many forwarders have end-to-end booking platforms.
I bet even large forwarders will start chartering ships if current price conditions for container shipments continue for long, like till Spring 2023.
And actually, I did not have to wait long. IN THE SAME LOADSTAR, on 10/22/2021, I found the second article.
Well, who would have guessed! Once Maersk built out its systems for booking shipments, it’s natural they would be cutting out forwarders. It’s what forwarders have been saying was going to happen for a while. and with Tradelens, Maersk can offer tracking, but also without involving forwarders.
This upstream cannibalism of customers may work for Maersk. They have worked very hard building their systems to make booking happen. And they are large enough to have a bit of market power over some forwarders.
But so much of all container lines’ traffic comes from forwarders. That part will go down, and more than it might, because forwarders will be bent out of shape and angry at having customers pirated.
I think it most hurts the littler guys, though, both forwarders and shippers.
But doesn’t Maersk have to focus on getting the ships to run on time? Blanking sailings and ships piling up outside ports are indicators of serious supply chain flaws. It would be more important for Maersk and other liner firms to do something about those issues.
Prices cannot continue to be through the roof as they are now, with containers not available or in the wrong place for cargo, or not being able to be moved, without crippling ocean container shipping in the long run.