London CI conference focuses on consolidation and schedule reliability
INDUSTRY consolidation and schedule reliability were big talking points at the Containerisation International's 14th Annual Global Liner Shipping Conference in London this week.
"There is more and more consolidation within the industry, both in capacity and at the relationship level. Ships get bigger and bigger, and no one can operate these monsters alone," said CMA CGM vice president (North America) Jean-Philippe Thenoz.

"Now the big question is volume: there are worries about where it will come from and where it will go," he said, adding that there was a need for global order to face rising overcapacity.

Said Ceva Logistics operations chief Bruno Sidler: "These major drivers won't go away: globalisation and consolidation. There will always be businesses being gobbled up by others."

Said Elkem traffic manager Marc Lembrecht: "If you look at what has been happening in the last couple of months, GDP has been going down. Carriers a few years ago took a bet and assumed growth would keep going."

Another issue was schedule reliability. While it has improved, it needs to be built into contracts between carriers and shippers to ensure long-term integrity, said Simon Heaney, research manager and London's Drewry Shipping Consultants.

"Historically, it was poor, in the range of 50 per cent, but more recently signs have been good. In Q4 last year the average was 69 per cent, and it's been in the low to mid 70s for the first two months of this year," he said.

Said Lars Jensen, CEO of Seaintel Maritime Analysis: "You need to put in a buffer time [in the contract] that is acceptable to both carrier and shipper."

Said Mr Lembrechts: "This is an important issue. The estimated time of arrival is built into customers' production plans; if this is not met, then they can really get into trouble."

Mr Jensen said reliability times needed to be measured by trade lane and not globally, and that it was the reliability of the delivery time of the container that needed to be measured, not the ship.

"Reliability has improved on the backhaul trades, such as Los Angeles to Shanghai, but the shippers on this trade lane, such as the waste paper shippers, don't care; it's the reefer shippers carrying cargo the other way for to whom this is important," he said.