Digital Forwarder Claims Solution to Overcome Costly no-Shows

CMA CGM is attempting to impose additional fees on shippers for costly late cancellations or “no-shows”.

News ID: 74465

Date: 14 June 2017 - 13:21

According to MANA, On 1 June, the liner operator introduced a cancellation fee of $150 per teu on its service from Northern Europe to the Red Sea, Middle East and Indian subcontinent.

But FreightHub, a Berlin digital freight forwarder for the Asia to Europe trades, is breaking with the system of imposing fines. It hopes to offer an incentive with the promise of guaranteed space to reliable shippers, or withdraw it for those whose record is poor.

Attempts by liner operators to impose punitive fines have been unsuccessful in recent years when there has been plenty of capacity available. Shippers have refused to pay or have switched carriers.

Lines also overbook on particular ships to account for anticipated no-shows. But FreightHub questions whether now is the time to make shippers pay additional fees, with capacity plentiful and carrier profits on the verge of a recovery.

Instead, it proposes to reduce the number of no-shows through the use of collated digital data to forecast shipping requirements.

That could help avoid friction between shippers whose cargoes cannot be loaded onto ships as a result of overbooking.

“Basically, those that have been showing up on time will be incentivised and those which did not manage to show up on time will not be given the extra space the next time,” said FreightHub co-founder and chief commercial officer Michael Wax.

FreightHub was set up in May 2016 by Wax and business partners Erik Muttersbach and Fabian and Ferry Heilemann, with backers from outside the shipping industry. It cites Hapag-Lloyd chief executive Rolf Habben Jansen as saying that for every four bookings, only three containers show up.

Wax says his company is working with five or six carriers, serving 120 ports in Asia and 20 ports in Northern Europe and the Mediterranean.

Its 250 customers have used the portal to ship containerised or palletised break bulk cargo from Asia to Europe. Last month, it opened an office in Hamburg, where it has a strategic partnership with Hamburg Sud.

It is one of several portals challenging traditional freight-forwarding companies. Some established players are defending their space with their own digital platforms, but Wax believes it is necessary for industry outsiders to come up with radically new ways of operating.