Has anything changed?

In searching through our
archives to prepare this
issue we came across a letter
about industry service levels
written 20 years ago by Christian
Gyntelberg, then manager sales
and marketing of the fledgling
Maersk South Africa operation of
the time.
Gyntelberg was responding to
an article claiming that service
levels in the shipping industry had
declined over the previous ten years.
He wrote:
In the last 10 years (this
would have been 1983-1993),
shipping lines have continuously
invested in equipment, staff and
software to provide higher service
frequency, faster transit time and
quicker, smoother operations and
information flow which benefits
shippers.
It may very well be that this
increased service level has
influenced the profitability of
forwarders and clearing agents,
but in our opinion this is still
resulting in a better end product
to the shipper than ever before.
And that is exactly why shippers
are now more interested in price
than before when it comes to
forwarding and clearing – because
they know that the real service is
provided by the shipping line who
takes physical charge of the cargo
movement from A to B.
We have always believed that
healthy competition benefits all
parties – to deliver a better product
at a lower price. A few good
examples within the transportation
industry have been the expansion
of container depots from one to
four in the Johannesburg area
which has resulted in lower storage
rates and better service to carriers
and shippers. And in the airline
industry, the liberalisation of flight
routes has resulted in reduced fare
prices and better onboard service.
Ultimately
a customer
will not risk
jeopardising
his bread
and butter –
namely the
goods he is either importing or
exporting – to save nickles and
dimes on transport, but will choose
his transportation partner by
evaluating the most cost-effective
compromise between price and
service.
This applies in the forwarding
business as well as in the shipping
industry on a more general level
– and in the shipping industry
today a lot of things are changing
as sanctions are lifted and trade is
liberalised.
As more carriers and more
forwarders enter the trade, the
price must come down according
to normal supply and demand
factors. And that is exactly what is
happening today – freight rates are
coming down, but at the same time
the shippers are demanding higher
service levels than ever before
because they have a wider range of
service providers to choose from.
Maersk is today one of
the world’s largest container
shipping lines, and although our
organisation in South Africa is
still relatively new and we are
learning new things every day, we
strongly believe in the survival of
the company with the best product
and the evolution of the industry
through competition.