LCL customers benefit from higher container rates

With sea freight rates on
the rise and set to continue,
according to maritime
analysts, non-vessel
operating common carriers
(NVOCC) customers are
reaping the benefits of using
LCL (less than container
load) options.
“Even though it seems
counter-intuitive, rising
ocean rates are a positive
for the LCL market. When
rates are low the breakeven
point to load an FCL (full
container load) is lower
even though the container
space may not be fully
utilised. However, as rates
rise the smaller loads move
to LCL as this is more cost
effective,” chief financial
officer of Vanguard Logistics
Services, Thurso Barendse,
told FTW on the sidelines
of an event to celebrate the
newly re-branded Vanguard
Logistics Services South
Africa.
Marketing director of
Vanguard Logistics South
Africa, Raymond Cutts,
added that another LCL
shipment benefit was the
fact that transit time was
faster with LCL compared
to other modes of shipment.
“This is because NVOCCs
offer a variety of direct
routes. It is also easier to
allocate freight costs to
an LCL shipment because
customers have a fixed rate
with the LCL operator. The
benefit is that the customer’s
margin remains constant
and it eliminates the risk of
running an under-utilised
FCL shipment.”
Cutts said the acquisition
involving South Africanbased
International
Liner Agencies (ILA) and
Vanguard had given ILA
customers access to even
more direct routes to
emerging and traditional
export and import markets.
“The increased global reach
has enabled us to make
our customers even more
competitive,” he commented.
Managing director of
Vanguard SA, Rod Taylor,
said the acquisition had been
completed in January last
year but the decision to fully
adopt the global branding
had only been taken this
year. “Initially we had ILA/
Vanguard co-branding to
ensure a smooth transition
for our customers who
have been dealing with our
company since its inception
in 1995,” he said.
He told FTW that there
had been a “seamless
integration” for ILA
customers. “We remain very
sales-focused and there has
been good export growth
out of South Africa since the
acquisition.”
Cutts said the company’s
African expansion plans were
on track, buoyed by a strong
Vanguard Logistics Services
presence in East Africa.
CAPTION
Kevin Taylor and Rod Taylor, Vanguard Logistics South Africa.
CAPTION
Raymond Cutts, Vangurad
Logistics SA.
CAPTION
Thurso Barendse, Vanguard
Logistics Services.