All of us in this sector have been waiting for months for one of the international competition bodies to focus on the major problem of the shipping companies' unethical practices.
We freight forwarders have been putting up with it for a long time, much longer than is acceptable, to try to continue providing service to our clients, we have long since had to accept the octopus as a companion animal and now we have to say that it is also friendly. And we put up with this and whatever else, we are used to it, but we have to denounce the situation and make it public, because the problem is not really ours, we are only intermediaries, the problem is global, 90% of everything that is bought uses maritime transport and all of this is going to be made much more expensive by this problem.
We are not only talking about the disproportionate and abusive increases in costs of more than 600% in less than a year, we are talking about the general despotism with which they treat shippers and on their behalf we, the freight forwarders. For months now, many shipping lines have been abusing their power, abusing the "roll over" (passing from one ship to the next in the interests of the shipping line), delaying departure dates, carrying out unplanned transhipments, etc. ... it goes on and on.
Freight forwarders have a duty to be bothersome and to denounce what is an unmitigated abuse, which is threatening the recovery of the economy, and all this because of the boundless greed of the shipping companies and the negligence of the competent world authorities, which should ensure good practices in trade.
This situation was initiated by the collapse generated by the pandemic and is still there complicating everything, with the Chinese government closing in recent weeks ports like Yantian or Ningbo and airports like Shanghai, for a single case of Covid, but I firmly believe that the current level of freight and the extreme lack of equipment is mostly due to the excessive greed of the shipping companies, which have seen a vein in making the most of their size (which is allowed by the competent authorities, inexplicably). There are currently 10 shipping lines, grouped in only three joint ventures (services/ships), which have managed to monopolise almost 90% of the world's traffic.
The formula they use is simple, the huge size of the few vessels they operate allows them to alter/falsify the law that should regulate the market, the "Law of demand and supply". Their large size allows them to adjust supply to demand, withdrawing/suppressing ships, the weeks that demand slackens, (applying "Blank Sailings" a la carte), with this formula, they always achieve an extreme demand for the few spaces they leave operational, which "justifies" a fierce fight for those available spaces and a rise in freight rates, it is a perfect plan and the rises seem to have no limits.
The big losers of this plan are, as always, the users/loaders, who are paying historically high freight rates and who are also receiving a terrible and unacceptable service, which puts many businesses at risk.
BUT, this gloomy outlook, it seems, may be starting to change ...
Yesterday we learned that the furniture firm "IKEA" has bought its own containers and is going to charter ships, to avoid these supply problems.
Today it has been published the news that the third shipping company in the world, the French "CMA-CGM", has announced that it will not allow the auction of its spaces, until February next year, which aims to stop the escalation of freight, I do not know if it will be an effective measure if the rest of the shipping companies do not join, but something is something ...
Today the "World Shipping Council" is considering the implementation of a "Reform Act" for this mode of transport, which should re-atomise the sector, in order to bring back the necessary competition in the sector.
Anyway, we will see what happens in the coming days.
