Executive Briefings

Cargo Owners Complain of 'Total Mess' Shipping Goods to Asia

The launch of two global container-shipping alliances last week got off to a rough start, with cargo owners in Europe complaining of long delays to carry goods to Asia.

The backlog is especially intense in northern European ports like Hamburg and Rotterdam where shippers say they have been asked by brokers to pay as much three times the agreed freight rates if they want priority handling.

“I’ll have 19 containers of olive oil stuck in Rotterdam for five weeks,” said Panagiotis Eleftheriou, a Greek agricultural-products exporter. “It’s a total mess, the worst I’ve seen in 20 years in this business.”

The two groupings — Ocean Alliance and THE Alliance — comprise 10 container operators that move close to 60 percent of all cargo between Asia and Europe; they have made network changes in a move to save costs by sharing vessels and port calls. A third alliance made up of the two biggest players, Maersk Line of Danish conglomerate A.P. Moller-Maersk and Switzerland-based Mediterranean Shipping Co., has been in place since early last year.

Industry executives said the current backlog stemmed from a rise in cargo destined for Asia and operators sending empty containers to Asia in anticipation of capacity shortages shortly before the launch of the alliances.

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The backlog is especially intense in northern European ports like Hamburg and Rotterdam where shippers say they have been asked by brokers to pay as much three times the agreed freight rates if they want priority handling.

“I’ll have 19 containers of olive oil stuck in Rotterdam for five weeks,” said Panagiotis Eleftheriou, a Greek agricultural-products exporter. “It’s a total mess, the worst I’ve seen in 20 years in this business.”

The two groupings — Ocean Alliance and THE Alliance — comprise 10 container operators that move close to 60 percent of all cargo between Asia and Europe; they have made network changes in a move to save costs by sharing vessels and port calls. A third alliance made up of the two biggest players, Maersk Line of Danish conglomerate A.P. Moller-Maersk and Switzerland-based Mediterranean Shipping Co., has been in place since early last year.

Industry executives said the current backlog stemmed from a rise in cargo destined for Asia and operators sending empty containers to Asia in anticipation of capacity shortages shortly before the launch of the alliances.

Read Full Article