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Users and providers of maritime
transport services are agreed about
the need for common approach and
cooperation to overcome the
prevailing uncertain trade condition
characterized by declining freight
rates, emerging surplus capacity and
fragile growth.
But neither could come up with
solutions on how a relationship
could be worked that benefited the
two sides.
Expressing their concerns at the 1st
Asia Maritime & Logistics Conference
last week, the CEOs of the region's
leading shipping lines, Datuk Hj
Mohd Ali Yasin of Malaysia
International Shipping Corporation
Bhd and Mr Flemming Jacobs of
Neptune Orient Line, said there is a
need to manage the supply and demand
in the liner industry.
"It has become increasingly
difficult to manage the supply in
the liner industry," said Jacobs at
the CEO's Forum held in conjunction
with the 1st Asia Maritime &
Logistics Conference in Kuala
Lumpur.
He said the pressure (to manage the
supply) was especially critical in
the light of prevailing environment
where the costs are going up,
including from events precipitated
by the September 11 incident.
Datuk Ali, CEO/Managing Director of
MISC, said the shipping industry,
especially the liner trade is awash
with capacity though unfortunately
this is a devise of the own creation
by the industry itself.
"Supply has out-paced demand. The
lemming-like shipping lines do not
seem to learn. Notwithstanding the
surplus capacity and deteriorating
freight rates, orders for
newbuildings are continued to be
placed by shipping lines, only
because the prices are low," he
said.
Responding to this, the Director of
Global Logistics, Nestle Ltd
(Switzerland) Mr Eduard Blank said
the prevailing environment could
potentially create instability in
the supply chain and this could
bring disrupt trade.
"It would therefore seem only proper
that both shipping lines or carriers
and shippers must learn to work
together," he noted.
Supporting the call, Jacobs, who
cited Nestle as an example of a
shippers that worked closely with
shipping lines, preferring stability
to cheap freight, there was always
the fear that some errant carriers
and shippers would break ranks,
particularly in a marketplace that
was highly competitive.
Mr Krishna Giri, a specialist in
software development for supply
chain management from IBM Singapore
stressed on the need for greater
shipment visibility and agreed the
way out for carriers and shippers to
ride out the uncertain times is to
work together.
"New processes drive technology
which in turn industry and in recent
times this has open opportunity for
the users and providers of ocean
transport services forge closer
relationship," he added.
Jacobs, who disclosed that Malaysia
was among NOL's two global IT hub
that served the worldwide needs of
the Singapore-owned shipping line,
said web-based technology offers
scope for greater cooperation
between buyers and sellers of
maritime.
He pointed out that web-based
application, that offered greater
visibility, the shipping line saved
shippers more than 60,000 telephone
calls a year.
Earlier in his speech, Datuk Ali,
who is the Chairman of Malaysian
Shipowners Association, commenting
about profound changes and
significant structural
transformation that could leave
"behind a trail of the fury that
leaves no place for the weak and the
infirm" , added "it is not all gloom
and doom,"
"The maritime industry is will
witness both horizontal and vertical
integration as part of a
value-adding process as well in
response to scale economies," he
said at the conference that was
attended by about 250 participants
from over 27 countries.
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