Forwarders in rates row
Larger players slammed for offering space they can't guarantee at cheap rates just to hit sales targets
Small and medium-sized freight forwarders have hit out at larger competitors for offering to ship containers at below market rates, even though it was likely the shipments would be heavily delayed.
Contacts told IFW that even during the Chinese new year holiday, certain forwarders had been approaching shippers, offering to move cargo from Asia to Europe for up to US$1,400 less than the going market rate and guaranteeing that they would get space on ships.
This was reportedly staff at larger forwarders trying to hit their targets and gambling on space on ships being available.
However, with space tight since November, carriers would roll containers booked at this rate in favour of customers paying the market rate.
Jamie Cramer, director of IFE Global Loaagistics, said: “The larger forwarders are offering dirt cheap rates and guaranteeing shipment, but it’s just a complete lie.
“Some are only getting around 50% of their business away at the lower rates, but they are over here telling anyone that will listen that they can get cargo shipped at very low rates.
“If you are in control of a business, you’ve got a responsibility to offer a rate that you can get the cargo shipped at.”
Cramer said his customers had tried shipping with the larger forwarders at the low rates, but had come back when their cargo had not been shipped.
Keith Traylor, general manager of Allport’s Tilbury office, said forwarders and shippers that had signed contracts for guaranteed space at guaranteed rates at the start of 2009, when rates were lower, were having contract bookings turned away in favour of higher-paying spot market cargo.
He suggested the larger forwarders could have been trying to sell at contract rates, even though there was a risk the cargo would be rolled.
He said: “Our customers come to us and say ‘I have a better rate from another forwarder’, and they may have a fixed rate deal, but we’ve also got fixed rate deals and we can’t get space.
“I would query whether they would actually get the space, because the lines were prioritising high-yield cargo – sometimes they would rather roll one shipper’s container because they can make three times the amount with someone else’s.”
Contacts told IFW that even during the Chinese new year holiday, certain forwarders had been approaching shippers, offering to move cargo from Asia to Europe for up to US$1,400 less than the going market rate and guaranteeing that they would get space on ships.
This was reportedly staff at larger forwarders trying to hit their targets and gambling on space on ships being available.
However, with space tight since November, carriers would roll containers booked at this rate in favour of customers paying the market rate.
Jamie Cramer, director of IFE Global Loaagistics, said: “The larger forwarders are offering dirt cheap rates and guaranteeing shipment, but it’s just a complete lie.
“Some are only getting around 50% of their business away at the lower rates, but they are over here telling anyone that will listen that they can get cargo shipped at very low rates.
“If you are in control of a business, you’ve got a responsibility to offer a rate that you can get the cargo shipped at.”
Cramer said his customers had tried shipping with the larger forwarders at the low rates, but had come back when their cargo had not been shipped.
Keith Traylor, general manager of Allport’s Tilbury office, said forwarders and shippers that had signed contracts for guaranteed space at guaranteed rates at the start of 2009, when rates were lower, were having contract bookings turned away in favour of higher-paying spot market cargo.
He suggested the larger forwarders could have been trying to sell at contract rates, even though there was a risk the cargo would be rolled.
He said: “Our customers come to us and say ‘I have a better rate from another forwarder’, and they may have a fixed rate deal, but we’ve also got fixed rate deals and we can’t get space.
“I would query whether they would actually get the space, because the lines were prioritising high-yield cargo – sometimes they would rather roll one shipper’s container because they can make three times the amount with someone else’s.”
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