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.
