A need for frank dialogue
Roles shifted in the sea freight industry in 2020. Forwarders see a need for discussion, on demurrage and detention fees, above all. Christian Doepgen spoke to Fiata’s Jens Roemer and Markus Warnebold, and Thomas Schwarzenbach, Spedlogswiss.
What is your overall assessment of the situation in the sea freight industry, gentlemen?
Jens Roemer (JR): As representatives of Fiata’s Working Group Sea Transport we can see that there’s something wrong with the market.
Isn’t more demand for maritime transport an advantage?
JR: The issue doesn’t only concern high sea freight rates, but also excessive demurrage and detention fees.
Markus Warnebold (MW): In principle, demurrage and detention fees were and are acceptable instruments to ensure the flow of containers. But it goes too far if, for example, a USD 88,000 surcharge is levied for three boxes.
How should demurrage and detention measures ideally be implemented?
JR: The answer to this question was provided by the Federal Maritime Commission (FMC), a US regulatory authority, in April 2020. First and foremost, the charges are a performance incentive to ensure the fluidity of operations – and not a potential revenue stream.
Isn’t it the simple the reality at the moment that supply chains are currently slower?
MW: Shipowners – just like other players – contribute to delays, for example through blanked sailings or slowed down loops. The exchange of data is additionally not advanced enough, so important deadlines, such as the time of unloading, are only known late.
JR: The reasons also lie in the capacity limits of the infrastructure in ports, which do not allow faster handling. The widespread deployment of large containerships has therefore slowed down processes. Today, export containers have to be delivered to a terminal four days before departure, instead of two, as previously.
What approach do you suggest?
Thomas Schwarzenbach (TS): Communication and cooperation between shipowners and forwarders are the key. To this end we’ve made Fiata’s toolkit on the FMC’s final ruling available to our member firms.
JR: Planning is difficult in the maritime supply chain at the moment, so this is one matter to address. So-called enforceable contracts, with both parties commiting to clear delivery conditions, could be one successful model, for example. Better data exchange is another good starting point. This, for example, would enable us forwarders to proactively start work 3–5 days before a consignment and its unloading is due, giving us time to handle the load faster, which improves services. We’re all the shippers’ joint customers, and thus all have a responsibility to act.
Do you see any solutions that can help to improve the situation?
JR: In the port of Antwerp, for example, initiatives for reliable delivery data have initially borne some fruit. We can build on this.
MW: Investment in more boxes and ships are one thing. We need fundamental solutions – arrived at in dialogue with shipowners.