RISK is
inherent in today's global cold chains with more temperature-controlled
products transiting the world than ever before.
One
big problem is the carrier's ability to cope with shippers' specific needs for
exceptional level of care, reporting and tracking of transshipments, says Drewry's
top analyst Neil Dekker.
Although
Mr Dekker credits Maersk Line's new remote container management system, it only
helps visibility and analytics, but there is more work to be done.
For
instance, when it comes to handling claims, "many shippers impress that
carriers are generally poor at handling them," Mr Dekker said. Shippers
are left with having to deal with the expense and time of managing claims.
Schedule
changes and missed sailings also hit reefer shippers disproportionately hard,
he said. In some instances, shippers must use air freight as an alternative.
Vessel-sharing
agreements and alliances can also amplify risk for reefer shippers. "The
changing alliance structure and the fact there are now fewer global carriers -
the merger/acquisition of the two Chinese lines into one, APL and UASC - mean
that shippers have to be more careful about how they plan and agree on their
contracts.
"With
more carriers slot-swapping on single services, it also means shippers need to
be more careful about whom they choose to partner with," Mr Dekker said.
Jim
Blaeser, vice president at New York-based consulting firm AlixPartners, said,
"Shippers always need to be concerned about - and prepared for - major
disruptions in their cold chains, like the port labour stoppages and carrier
bankruptcies we've seen recently.
"But
the day-to-day challenges posed by deteriorating carrier service levels are
equally troublesome, and in some cases harder to overcome. Carriers have been
scrambling to cut costs wherever possible to stay solvent, and shippers
ultimately feel those impacts in their supply chains nearly every day. Plus,
the stakes are even higher for reefer shippers, due to the perishable nature of
their cargo, which also tends to be higher in value," said Mr Blaeser.
Marcel
van Dijk, manager of cargo marketing at the Port of Los Angeles, said carriers
are battling the effects of historically low rates and the impact on their
business.
"Reefer
business has always been the money maker for the container business," he
said. Not only do carriers charge a premium on reefers, but they also are
gaining market share at the expense of conventional reefer carriers.
Then
again, "If you don't make money on your dry boxes", as has been the
case for carriers the last five years, "you start to slow down
investments, except for building larger ships," he said.
Furthermore,
maintaining the quality of the reefer equipment is generating some concern,
"but demand on the part of shippers to provide top quality product to their
overseas customers will help keep reefer rates at a healthy level for the
container lines," said Mr van Dijk.
Executives
at the Port Authority of New York and New Jersey understand the myriad risks
associated with handling reefer cargo, and they are positioning the port and
its logistics partners to help support new and evolving demands, from
responding to the impact of the Food Safety Modernisation Act to preparing for
growing volumes of reefer cargo.
"Refrigerated
cargo is an important market for the port," said Sharon McStine, manager
of industry and government relations. The Port of New York and New Jersey has
nearly 5,000 reefer plugs now, among the largest capacity on the US east coast,
she said.
Marine
terminal operators are expanding reefer capabilities while cold storage
capacity in the region is also growing, Ms McStine said.
From
the carriers' perspective, the marine terminal operators and the port
authority, "reefer cargo is precious cargo, and it's treated accordingly
by everyone," said Robert LaMura, New York port authority manager of
maritime industry relations.
For
example, the port authority's marine terminal operators have stringent
monitoring processes for reefer cargo, he said, which really sets the port
apart in its dedication to this type of cargo.
Source
: HKSG.
