Maersk Line is planning to start charging customers that fail to fulfill bookings, but is also prepared to pay out if it fails to load a container.
Speaking exclusively to IFW, Maersk Line’s Senior Director for Charge Management, Network and Product, John Nielsen, said that, on average, around 20% of containers failed to turn up for the vessel they are booked on globally
However, he added that “downfalls”, as they are known in the industry, have been as bad as 40% on some sailings.
In order to reverse the situation, Maersk Line plans to charge customers US$100 per dry container and $500 per reefer container that fails to turn up for the vessel it is booked on.
But, added Nielsen, it is prepared to pay compensation of the same amounts if Maersk cannot pick up shipment because of overbooking, operational constraints or equipment shortages.
There would be a window to allow customers to cancel or change a booking, with the charge implemented if the cancellation happened with less than seven days’ notice before vessel departure.
Nielsen stressed that the charge was not designed as a revenue generator, but to change customer behavior.
He said: “Some customers pay for others’ mistakes.”
It is well known that a percentage of bookings will be downfalls. The only way shipping lines can compensate for that is to overbook the vessel, said Nielsen.
“Then if the downfalls do not come, you have too much cargo and you need to leave some behind. That hurts the well-behaved customers who end up paying the price for the overbookings made by others.
“We want to make sure that when they have a booking confirmation, then we will load it. Then customers can plan their supply chain better.”
He said Maersk Line planned to roll the scheme out to the majority, if not all, load ports so it became the standard way of operating.
But he said it was not planning a global “big bang”, but would focus on implementing it “by geographies and services in a prioritized manner, to ensure proper customer dialogue can take place prior to go live”.
So far, Maersk has run pilot schemes in Sweden and in a couple of locations in South America and Germany.
Nielsen said: “There is always a considerable amount of skepticism before implementation. When we announced this, very often, no matter how we try to communicate it, the first word the customers seem to hear is ‘charge’.
“But it is our impression that once you start to get data on current performance, and you discuss it with the customer, in many cases customers are surprised to see how many cancellations they actually have.
“To my knowledge, we have not had any adverse customer reactions. There might have been some that I have not heard about, but none to the extent that would stop the implementation of it.”
Damian Brett | Thu, 23 Jun 2011, IFW News