Shippers Skeptical about Shipping Alliances’ Benefits

Emergence of major shipping alliances has not convinced major shippers of the benefits they promised to bring.

While speaking at this week’s TOC Container Supply China event in Singapore David Panjwani, global logistics director for US machinery manufacturer John Deere said that the emergence of four large east-west shipping alliances, combined with the introduction of larger vessels and deteriorating schedule reliability levels had caused a series of problems in the company’s supply chain that impacted its customers.

“Do the larger alliances and vessels cause more headaches for shippers? In a word, yes,” he said.

While lines have claimed that by combining networks through alliances structures have led to a greater choice of port calls for shippers, Panjwani argued that the net effect was longer service lead times.

“We assume that there will be more port calls per string, and more slow steaming which both extends shipping times, and there are continued challenges with service interruptions.

“We don’t have a lot of exciting things to say in terms of reliability of shipping products – if anything, it’s the opposite. I was in Australia last week and it was a very unpleasant experience, because we are continuing to fail to meet our customers’ delivery dates,” he said.

According to Panjwani, even though the combined networks looked good “on paper”, now, when there are only four of them, “we have concerns about what this will look like in the long term”.

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