Leading forwarder urges strong carrier relationships, 9th Jan 2012

News Release SBS Worldwide Inc January 9, 2012

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London,
9th January 2012 - Global supply chain provider SBS
Worldwide has urged shippers to use logistics providers with strong
relationships with shipping lines or they could find their shipments left on the
quay side.
The warning comes as shipping lines have been
withdrawing capacity because the industry has been suffering from over-supply of
vessels on key trade lanes.
SBS Worldwide Group Chairman Steve Walker said: “When
shipping lines remove services in order to balance supply and demand, it results
in a short term reduction in capacity.
“When this occurs, shipping lines will leave
containers behind - it tends to be those being transported on behalf of shippers
with short-term supply and demand driven carrier relationships that suffer this
fate.
“The best way to avoid being affected by a situation
like this is to make sure that your logistics provider has strong, long-term
relationships with more than one reliable shipping line on any trade lanes where
you require transport services.”
Walker added
that there are already reports of some cargo being left behind as the result of
a mini surge in cargo from China as companies attempt to export ahead of the
closure of factories for the Chinese New Year celebrations.
The service withdrawals come as carriers have had a
tough year. Record profits in 2010 turned to losses in 2011 because of
overcapacity in the market.
To reverse the
oversupply situation, carriers have been busy removing services and laying-up
vessels.
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According to shipping
line analyst Alphaliner, the number of vessels taken out of service - an
indication of how many ships have been temporarily withdrawn from service – at
the start of December was 19.8% higher than the start of
November.
 
The shipping industry
was struck by a major capacity shortage in late 2009/early 2010, when shipping
lines removed a glut of capacity – to correct an oversupply situation - at the
same time as an unexpected boom in business.
 
The volatile mix
resulted in months of delays to containers as shipping lines were unable to
provide enough space on ships.
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