Shipping lines "encroach" to open a chain of "threats" to logistics businesses

Shipping lines use the huge profits generated during the Covid-19 crisis to expand the chain to include transportation, warehousing, logistics services...

At the meeting of the Working Group Sea, the Congress of the Federation of International Freight Forwarders Associations (FIATA) - FIATA World Congress 2022 (FWC 2022) is taking place in Busan, Korea, said Jens Roemer, Senior Vice President of FIATA and Head of the FIATA Working Group Sea, that the maritime supply chain is disrupted with all its challenges still present.

In this extremely challenging environment, FIATA's management team and staff always do their best to keep the goods moving.

Accordingly, Mr. Jens Roemer said: "To keep goods moving smoothly, sometimes it is necessary to plan up to 10 times for the same shipment due to delays and unforeseen changes. The delivery time frame at the ports of destination is constantly narrowing, making our work sometimes impossible. Everything planned is not certain."

According to Jens Roemer, it's not the digitization, not the algorithms, the processes, or the platforms that keep the containers moving, but the well-trained human resources.

"However, we all have to invest in digitization. This is very important. Our industry must invest, and FIATA will also have to do more to support businesses in the digital transformation industry", emphasized FIATA Senior Vice President.

In addition, the FIATA Senior Vice President also added that one of the most important items on the agenda is fair competition related to the vertical integration of shipping lines in the maritime supply chain.

Specifically, shipping lines use their huge profits generated during the Covid-19 crisis to invest, "encroach" to expand the chain to include transportation, warehousing, logistics services...

"We are in a free market where competition is good, but it has to be fair and on a level playing field. But this is not the case, "said Jens Roemer.

FIATA Senior Vice President said that in a recent development, the German Government seems to have approved the sale of DB Schenker - the world's top 5 logistics company and there are "rumors" that Maersk Line - the "giant" has an interest in this.

The FIATA Working Group Sea emphasized the need to continue to "fight" for reform of relevant regulations, including practical application and charging of storage fees.

"For example, terrible flooding has hit Pakistan and according to The Loadstar, container demurrage and detention of up to 14 million USD is said to be due by shippers and consignees that will have to pay to shipping lines," Mr. Jens Roemer emphasized. Thus, it can be seen that the issue of being unilaterally imposed by shipping lines unfairly is being given special attention by FIATA.

In particular, the Senior Vice President of FIATA emphasized the issue of high freight rates. Citing statistics from UNCTAD, the impact of freight rates contributes to global inflation of 1.5%. Pakistan alone reported 27.3% inflation in August.

Mr. Jens Roemer, Senior Vice President of FIATA and Head of the FIATA Working Group Sea

Therefore, FIATA reminds members to refer to the "toolkit" on container demurrage and detention to handle arising cases. For example, in this "toolkit", FIATA proposes to charge a demurrage and detention not exceeding two times the value of newly built containers.

In a recent report of ITF - World Transport Forum also mentioned unfair competition related to vertical consolidation of shipping lines. Therefore, the Report recommends that governments should strengthen their capacity to monitor competition in shipping. The report also recommends that competition regulators should strengthen cross-border cooperation, as their activities are interdependent.

"It was also our view when we gathered regulators from four continents in May at the Council session in Geneva," emphasized FIATA Senior Vice President.

In light of this fact, the leadership of the Working Group Sea will continue to advocate with global regulators relevant to competition regulation governing maritime supply chains; Help forwarders deal with vertical integration by looking for mutually enforceable terms and reporting abuses of dominance; Implement a sustainability agenda by exploring viable options for micro and small businesses; Engage in advocacy, external relations, and capacity building to seek logistics company-friendly reforms, facilitating interaction with experts for WG Sea delegates.

Regarding the digital program, continue to promote electronic bill of lading (eFBL), protect data, help businesses prepare for the requirements of ICS-2 version 3, contribute to the US-led FLOW initiative-FMC.