Oh the Woes with these Carrier Bunker Surcharges. As Carrier's were just starting to make progress in the battle to recover some of their costs for the Bunker Fuel, the fuel prices drop. This should be a good thing, because if the surcharges are written into the contracts, that means the Carriers should be recovering a higher percentage of their costs. This is true, but too many Carriers are backing off and lowering their surcharge for the purpose of lowering their shipping price. The lower the shipping price the more customers will want to ship with that Carrier. As soon as a couple Carriers lower their surcharge amount, then every Carrier must, or they will suffer from a loss of customers. This is one battle that the Carriers must fight together and not go Volume chasing. If this continues then the cost recovery the Carriers just started to break ground in will be for nothing. The Carriers need the volume to stay afloat in this hard economic time.
When is the Shipping and Transportation industry going to learn what a good customer is and that it is rarely worth it to chase the bad customers. A good customer is a high profit and high volume shipper. A bad customer is a low profit and any volume shipper. Some customers are such poor customers that Carriers lose money on shipping the cargo just to fill space on a ship. SAD SAD SAD. As an industry, we must come together and work together to help each and every customer, terminal, and carrier through this tough economic time. That means, not lowering bunker charges and rates, but cutting costs. Cut the costs, the pork barrel if you must in the middle. Find ways to cut the amount of moves a container makes before loading and discharging. Streamline your processes, don't just take each and every customer possible. Look into each one and make sure it is cost effective.
Just please, don't throw away the progress that has been made.
October 15, 2008
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