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Dec 6, 2020 at 3:32 PMWith an urgent appeal, the DSLV Federal Association of Freight Forwarding and Logistics calls on container shipping lines to return to normalcy. The shipping companies are jeopardizing the economic recovery of the European economy with their current scarcity and pricing policies. Waiting times are also being criticized.
(Berlin) The global pandemic has exacerbated the consequences of the existing imbalance in the availability of containers between Western and Asian ports on one hand and the reduction of capacity in liner shipping on the other; with serious consequences not only for German freight forwarders but also for their customers. The reliability and stability of maritime supply chains are crucial for the entire European economy. For this reason, the DSLV Federal Association of Freight Forwarding and Logistics urgently calls on container shipping lines to restore the reliability of schedules and the necessary service quality.
Limited Cargo Space = Rising Prices
The pandemic and uniform behavior dramatically narrow the market supply for cargo space and container capacities, causing sea freight rates to rise. “The shipping lines simply do not provide sufficient capacities,” criticizes Willem van der Schalk, spokesperson for the Committee of German Port Forwarders in the DSLV (KDS in DSLV). “Additional frustration arises for freight forwarders because they are forced into a flexible emergency planning mode to respond to the very short notices from shipping companies regarding the availability of containers and ship space.” The costs for the freight forwarding industry are considerable: they arise from rebooking shipments and constantly new fees and surcharges for shipping guarantees. As a result of pandemic-related production stoppages and factory closures, containers are piling up in America and are not available for other destinations. Freight rates are rising, and waiting times are getting longer. Shipments can hardly be booked before the Chinese New Year in February 2021. In the end, the freight forwarder risks losing customers due to a lack of planning certainty.
Profit at the Expense of Forwarders and Shippers
In this context, container shipping lines are already benefiting unilaterally and to the detriment of German forwarding companies from special legal privileges under the European Group Exemption Regulation for consortia, which was extended again by the European Commission in April of this year. Brussels has repeatedly granted the exemption of shipping companies from regular competition rules. According to the Commission, customers of the shipping companies would benefit from efficiency gains achieved through coordinated capacity management in a shipping consortium. “The opposite is the case,” criticizes van der Schalk. “Such unilateral competitive privileges are outdated. They allow shipping companies to influence the market, for example, through non-sanctioned agreements.” The inaction of the Commission annoys freight forwarders: While the US Federal Maritime Commission recently intensified its scrutiny of the activities of container shipping lines, Brussels has not reacted at all in the current crisis.
End the Current State
“Container shipping lines must finally end the current state and return to business practices where they are not the sole beneficiaries and contractual agreements are adhered to again,” demands van der Schalk. “Further delays in supply chains could jeopardize the rapid recovery of the European economy after the pandemic. Overcoming the crisis requires cooperation and goodwill from all parties involved.”
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