Freight Shipping Quality vs. Quantity

IMG_1510Shippers often seek the best ocean freight shipping rates available. However, the best price might not equate to the best service. Sometimes, problems can occur in the transportation process, which could result in a delayed shipment or a missing container. The Loadstar recently interviewed the chairman of Kuehne + Nagel about how some carriers offer discounted rates tied to poor shipping services. The report suggests that shippers are willing to pay higher rates for a more reliable cargo shipping service, mainly for urgent matters. Otherwise, most shipments would still be dictated by best price. One factor for shippers to choose a premium service (that costs more, but is more reliable) is how often they would actually need the premium service. The article also said that some companies already want and receive that type of premium service. However, is the recent port congestion a factor for the demand for premium shipping services, and will the demand evaporate once the congestion ends?

Meanwhile, the maritime shipping industry is going through an evolution regarding the larger sizes of ocean vessels. The Journal of Commerce recently reported that the Director for Clarkson Research Services suggested that shipping companies should focus more on quality instead of quantity, by investing in better services instead of bigger ships. His claim is that bigger ships, while less expense on paper, have real world costs that add up. His suggestion is to invest in better technology as a service. He says that shipping carriers should use technology so that shippers can bid for available capacity on vessels.

It is clear that while price is a major factor for choosing a shipping service, shippers should always value the quality of the service. After all, a better rate might mean sub-par services and result in a loss for a shipper. Speak to a trusted freight forwarder so that you can find the best quality service for your shipment.

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