Shipping agencies’ business models have changed massively over the past few years. A recent agreement signed between Ozean Brokerage & Shipping and Agility, the parent firm of Natural Shipping, to transfer the representation of ACL, has shown a workable approach for Switzerland. Michael Bubendorf and Marek Fausel discussed the move with Christian Doepgen.
Congratulations, gentlemen, on the contract signed by your companies, which transfers representation of ACL from Natural Shipping to Ozean Brokerage & Shipping. How did the deal come about?
Fausel: We sought to get in touch with Ozean Brokerage & Shipping for Natural Shipping – and immediately encountered a vivid interest in representing ACL.
Bubendorf: As Grimaldi’s active representative we were happy to get an opportunity to add ACL to our portfolio as our eighth principal. We’ll officially commence operations on 1 August.
What are some of the deal’s details?
Fausel: We sought a solution that suits the market, the shipping line as well as the employees. We achieved that.
Bubendorf: Franco Forlin and his colleagues supply additional expertise to our team – and luckily we don’t have any conflict with existing principals with ACL.
What is the context underlying this decision to represent the shipping line?
Bubendorf: There’s more pressure in the boiler than there used to be. Business models depend on efficiency and synergies in times when shipping line’s freight rates are declining.
Fausel: Agility has decided to concentrate very clearly on its core activities, that is to say on its maritime, air, overland and logistics services. Our strategic approach focuses on specialised industry solutions for the pharmaceuticals, nutrition, retail and machinery sectors.
How has business changed of late?
Fausel: Hanjin’s bankruptcy clearly illustrated the market’s volatility. Consolidation amongst shipping lines is also reflected amongst agents.
Bubendorf: There were three types of reactions – some shipping lines opened their own agencies, whilst others dropped this model entirely. A third reaction to developments was to outsource this activity to professionals.
How did the shipping line react?
Bubendorf: We were ready to make some concessions to the shipping line in the process of adjusting commissions to prevailing market rates. However, the quota allotted to us was increased in return – it will double by 1 August.
Fausel: We were always able to make full use of the quota allocated to us and have observed a steady rise in demand.
What kind of cargo are we talking about?
Bubendorf: We’ve looked after a good mix of different types of valuable cargo in the past, including reefer consignments, breakbulk shipments and the like. For a small country such as Switzerland we account for a disproportionately high share of the shipping line’s volumes.
Fausel: This example shows that Switzerland remains an agent’s market. For a long time the assessment of this was rather different.
What profile has Ozean gained?
Bubendorf: I think we can safely say that, together with niche players, Ozean Brokerage & Shipping can offer global coverage today. We took over the agency Stream Lines on 1 August 2016, for example. The fewer contact people we have, the more our clients can benefit from our services.
Fausel: We’re really pleased that our colleagues can move into a rather productive environment and that the opportunities for market partners continue to improve, thanks also to staffing continuity.
You came to an unusually rapid decision in the process of carrying out due diligence procedures. On what basis?
Bubendorf: We had an opportunity to expand our portfolio and team. Why pass this chance up – as the chemistry was right too?
Fausel: The solution seems logical to everyone involved, also to the shipping line. This enabled the uncomplicated completion of a ‘friendly handover’ in a very short time.