Ocean carrier service levels deteriorated after consolidation
- Ocean carriers' service levels were on the decline in 2017, according to the second annual shipper satisfaction survey of 400 shippers conducted by Drewry and the European Shippers Council.
- Shippers ranked 16 services on a scale of 1 (very dissatisfied) to 5 (very satisfied), and gave carriers an average score of 3.2 across all services. Customers were only dissatisfied with three categories, however: reliability of booking/cargo shipped as booked, transit times and overall quality of customer service.
- Transit times was the only category to drop from above a 3.0 grade to unsatisfactory compared to last year, whereas financial stability ratings improved from around 2.79 in 2016 to roughly 3.37.
2016 was one of the worst years for carriers in the shipping industry's history, yet, somehow, customer satisfaction declined even further in 2017.
You could blame it on the industry's consolidation.
Throughout last year, the wave of acquisitions seen in 2016 were finalized. Hapag-Lloyd closed its merger with UASC in May, and Maersk finalized its purchase of Hamburg Sud in December. Mergers and acquisitions take time to reap their benefits in part because of the onerous process of combining systems — a task which could have serious consequences for customers if, for example, systems cannot properly book cargo.
Shippers also saw a set of new shipping alliances take form, altering many service loops. In the short transition time, port congestion was a common storyline thanks to confusion between carriers, logistics providers and shippers.
Even with the global cyberattack that roiled bookings in 2017, though, the disruptions faced by shippers pale in comparison to the way Hanjin Shipping's bankruptcy upended supply chains in 2016.
Later, the event was used as a foil for the industry's consolidation. In fact, carriers marketed these new alliances and mergers as necessary both for financial stability and improved customer service. But the latest satisfaction survey shows they have had the opposite effect.
"It is disappointing that, even after the big re-organisation of container services following the start of new alliances, carriers still do not meet the expectations of their customers - on the contrary,” said Nik Delmeire, Secretary General of the European Shippers’ Council in a press release.
As carriers have focused on reestablishing financial stability, the survey makes clear they have let other key duties fall to the wayside. Duties such as working through operational problems with shippers as partners, rather than beholden customers, is a key complaint from shippers in 2018.
“At the time of the survey, the carriers’ Emergency Bunker Surcharge, which we regard as customer unfriendly, was not yet in place, and it is reasonable to think that the results of the survey would be worse if it was done now,” Delmeire added.
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