Home » Breaking News, Features » Ocean carriers helpless against cargo no-shows?

Cargo no-shows and phantom bookings are still an unresolved issue for ocean carriers, particularly during the peak season, according to Drewry Maritime Research.

The problem is not new and underlines a continuing inefficiency of deep-sea supply chains, said Drewry.

Add to this is that forwarders make phantom bookings in the hope of a strong market, as they try to reserve more than enough space in the hope of capturing new customers.

But ocean carriers’ attempts to minimize the damage by imposing heavy penalties still appear ineffectual. This is compounded by late cargo delivery cutoffs having become a highly competitive feature of most carriers’ sales strategy.

Tracing the cause of no-shows is not easy, as it can be due to a number of reasons, including delays with intermodal transport, regulatory problems, unexpected production difficulties, container equipment shortages, and feeder vessel schedule failures.

This makes the strict enforcement of late cancellations fees difficult, especially as it is also still a “buyer’s market”—with carriers focused more on freight rates instead of value-added services.

Drewry said 29 percent of cargo booked in the first quarter of this year failed to be shipped on time, although this includes delays caused by deep-sea vessels not arriving for loading punctually. This was even worse than the 27 percent of ships that failed to arrive at destination on time.

There has been a gradual improvement, however, since Maersk Line started calling for greater penalties for late delivery of bookings and stricter rules.

Since then, ocean carriers have been rolling out penalties for late-cargo delivery on a regional basis. At the beginning of this year Maersk’s network of late-delivery charges reached Australia, where a penalty fee of $100 per dry container for booking cancellations made within seven days of ETA was introduced.

OOCL’s fee of GBP250 per container for cancellation requests received less than five working days before arrival of vessel reached the United Kingdom on March 19, 2013.

According to Maersk, it still received about 2,700 ghost bookings in all trade lanes in the first 22 weeks of this year, totaling around 12,000 40-foot-equivalent units, but this was at least 50 percent less than five years earlier. However, instead of being mainly an Asian problem, it has become more global.

At the recent Retail Supply Chain conference in London, retailers said their focus now is to improve availability of products on the shelf or in the store to minimize lost sales. As slow steaming seems set to stay, or even get worse, supply chains need to further improve their efficiency, with further minimizing no-shows and phantom bookings a good place to start, said Drewry.


Photo: kojotomoto

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