'Big forwarders rate cut by promising what they cannot deliver'

SMALLER forwarders in Britain have blasted their major rivals for offering to ship containers at below market rates, not caring if the boxes will make the ship they promised, reports London's International Freighting Weekly.

With space tight since November, carriers would roll containers booked at low rate in favour of customers paying the market rate, said the IFW report.

Contacts told IFW that even during the Chinese new year holiday, certain forwarders had been approaching shippers, offering to move cargo from Asia to Europe for up to US$1,400 less than the going market rate and guaranteeing that they would get space on ships.

It has been alleged that this was result of salesmen trying to meet targets and betting that space would be available but not caring whether it was or not.

"The larger forwarders are offering dirt cheap rates and guaranteeing shipment, but it's just a complete lie," Jamie Cramer, director of IFE Global Logistics, was cited as saying in the report.

"Some are only getting 50 per cent of their business away at the lower rates, but they are over here telling anyone who will listen that they can get cargo shipped at very low rates," Mr Cramer said. "If you are in control of a business, you've got a responsibility to offer a rate that you can get the cargo shipped at."

Keith Traylor, general manager of Allport's Tilbury office, said forwarders and shippers that had signed contracts for guaranteed space at guaranteed rates at the start of 2009, when rates were lower, were having contract bookings turned away in favour of higher-paying spot market cargo.

He suggested the larger forwarders could have been trying to sell at contract rates, even though there was a risk the cargo would be rolled.

Said Mr Traylor: "Our customers come to us and say 'I have a better rate from another forwarder', and they may have a fixed rate deal, but we've also got fixed rate deals and we can't get space.

"I would query whether they would actually get the space, because the lines were prioritising high-yield cargo - sometimes they would rather roll one shipper's container because they can make three times the amount with someone else's."

(Source: www.schednet.com)