Analysis: Shippers asking for a seat at the table?
When air carrier Emirates announced earlier this year that it was changing the way it calculates surcharges, essentially raising the prices for customers, shippers worldwide expressed distaste at what could soon become a trend in the industry.
It’s not just that shippers would effectively pay more for sending the same amount of goods, an industry source told American Shipper, but also there remains no transparency in the surcharge decision-making. While shippers may know these charges are paying for operational costs, it’s hard to see the fees put into action.
“If transparency is lacking, the shipper and the forwarder are going to start not trusting the airline,” the source said.
A general lack of visibility and a sense that shippers may be missing something has pushed them to start playing a larger part in the air cargo process. This is not merely a reaction to surcharges, but a push to a different way of doing business. Shippers want a bigger seat at the table, asking to be included in conversations with airlines that were historically left just to the forwarder. But this quest, which has cropped up before, may never even get off the ground.
“It’s so early in that process that nobody really knows if they’re going to succeed at getting what they want as far as a seat at the table,” the analyst said. “Is this a trend or just a bunch of shippers rattling their swords? I think it’s too early to tell.”
Anand Medepalli of JDA Software Group advocates for a collaborative relationship between shipper, forwarder and airline. He started seeing the trend developing in the last few months, spurred on by Ericsson’s decision to change the way it does business with forwarders after the ash-cloud crisis in 2010.
“(Ericsson) realized, 'we have totally outsourced our thinking to somebody else, and those people haven’t done enough thinking,'” he said.
Medepalli added that was a wake-up call to shippers, showing them they need to be more involved in the air cargo process. Now, conversations about giving shippers a bigger part to play have been swirling around for the past few months.
“The conversations at the seed-level are definitely happening,” he said.
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