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Thursday, 6 May 2010

The Japanese car carriers are back..cars sales must be down.


(You are getting this note because you subscribed to The Shipping Blokes Blog by Brad Skelton)

You can always tell car sales globally are down when the Japanese car carriers start chasing business for high and heavy cargo, like earth moving machinery, that usually holds little or no interest for them. You have to try and fill those ships somehow in a downturn.

From my perspective the GFC has had both positive and negative impacts on the RoRo (roll on/roll off) shipping market.

One of positives includes rates coming back to earth. Probably too low to be brutally honest as we are still seeing rates in the market at levels I haven't seen since the 1980's. The carriers cannot sustain these levels for much longer so I firmly believe increases are just around the corner.

Carriers have been scrapping older ships which are less fuel efficient, and operationally constrained with their lower ramp capacities and speeds. This is a double edge sword though. While it is actually good to move the older girls on, with fewer vessels working it has meant that sailing frequency has dropped in many trade lanes and this combined with slower steaming speeds, to save fuel, means that you may have to wait longer than usual for your cargo to arrive.

In an effort to fill their vessels RoRo carriers have been calling at more out ports. In other words, calling at ports that are normally not scheduled and going where the spot packages of cargo are. Prior to the financial crisis it was simply not possible for carriers to even consider a deviation from the main ports. With demand strong, they were under too much pressure from their big customers to get that cargo to market. NOW!

Out of adversity there is always opportunity for enterprising people. We have seen some new carriers enter the market such as Partner Shipping's NAPA service which has brought real competition to the market between North America and Australia. We have also seen other carriers, like Wallenius Wilhelmsen, enhance their USWC transhipment services via Manzanillo. both of these things are a win for shippers.

So, what's next?

I think it depends a fair bit on what is happening economically in Europe right now however assuming cargo volumes continue improving, then freight rate restoration will soon be inevitable. As global demand for cars comes back, then if they run true to past form, we'll be saying "sayonara" to the Japanese car carriers again until the next downturn.

All for now,

Brad Skelton

The Shipping Bloke

The Japanese car carriers are back..cars sales must be down.


(You are getting this note because you subscribed to The Shipping Blokes Blog by Brad Skelton)

You can always tell car sales globally are down when the Japanese car carriers start chasing business for high and heavy cargo, like earth moving machinery, that usually holds little or no interest for them. You have to try and fill those ships somehow in a downturn.

From my perspective the GFC has had both positive and negative impacts on the RoRo (roll on/roll off) shipping market.

One of positives includes rates coming back to earth. Probably too low to be brutally honest as we are still seeing rates in the market at levels I haven't seen since the 1980's. The carriers cannot sustain these levels for much longer so I firmly believe increases are just around the corner.

Carriers have been scrapping older ships which are less fuel efficient, and operationally constrained with their lower ramp capacities and speeds. This is a double edge sword though. While it is actually good to move the older girls on, with fewer vessels working it has meant that sailing frequency has dropped in many trade lanes and this combined with slower steaming speeds, to save fuel, means that you may have to wait longer than usual for your cargo to arrive.

In an effort to fill their vessels RoRo carriers have been calling at more out ports. In other words, calling at ports that are normally not scheduled and going where the spot packages of cargo are. Prior to the financial crisis it was simply not possible for carriers to even consider a deviation from the main ports. With demand strong, they were under too much pressure from their big customers to get that cargo to market. NOW!

Out of adversity there is always opportunity for enterprising people. We have seen some new carriers enter the market such as Partner Shipping's NAPA service which has brought real competition to the market between North America and Australia. We have also seen other carriers, like Wallenius Wilhelmsen, enhance their USWC transhipment services via Manzanillo. both of these things are a win for shippers.

So, what's next?

I think it depends a fair bit on what is happening economically in Europe right now however assuming cargo volumes continue improving, then freight rate restoration will soon be inevitable. As global demand for cars comes back, then if they run true to past form, we'll be saying "sayonara" to the Japanese car carriers again until the next downturn.

All for now,

Brad Skelton

The Shipping Bloke

Sunday, 25 April 2010

Customer loyalty... going, going, gone?

(You are getting this note because you subscribed to The Shipping Blokes Blog by Brad Skelton)

Has anybody else noticed that customer loyalty seems to be dying a slow death as the forces of the internet gain more momentum? Now todays customers are better informed than ever in making their buying decisions and realise they are the ones holding all of the aces.

Courtesy of the internet today's customers can quickly search and find vast numbers of alternative suppliers of virtually any product or service and get real-time price comparisons. They don't really care anymore how long you have been in business or how big you are or how many offices you have or what great marketing promise you have come up with. The business climate has changed forever and the balance has tipped firmly toward the buyer and not the seller. Any company that thinks they can force customer loyalty somehow is now completely out of touch. In fact todays buyers can and probably will rebel against them.

If you think it is about price and price and price, then you are wrong. Sure it is a major factor in any buyers decision and every company needs to be competitive to survive however recent research suggests that in this fast paced world we live in people value their time and benefits more than their money.

This is the topic my good friend and mentor, Bob Bloom, has based his latest book "The New Experts" on. Bob has had a lifetime in marketing working for customers such as BMW, L'Oreal, Nestle, Southwest Airlines and little old Skelton Sherborne. Before retirement he was CEO of Publicis Worldwide. His immense experience is second to none and I always enjoy his no nonsense, cut through the crap style. Bob's common sense or perhaps "uncommon sense" approach has been dynamite for my business in helping me attract and retain the worlds leading shippers of heavy equipment and machinery.

I was sincerely honoured when Bob chose to write about some of the initiatives in freight forwarding we have come up with for our clients and even more honoured when he asked me to write an endorsement for "The New Experts".

This book is relevant, enjoyable and a compulsory read for anybody trying to come to terms with the thinking and habits of the new customer.

Bob has been kind enough to give me ten copies of his book. I will send a free copy to the first ten readers that leave a comment at www.TheShippingBloke.com offering a personal experience to the readers of this blog in dealing with the attitudes of todays customers.

If you miss out then you can buy a copy of "The New Experts" here.

All for now,

Brad Skelton

The Shipping Bloke

Customer loyalty... going, going, gone?

(You are getting this note because you subscribed to The Shipping Blokes Blog by Brad Skelton)

Has anybody else noticed that customer loyalty seems to be dying a slow death as the forces of the internet gain more momentum? Now todays customers are better informed than ever in making their buying decisions and realise they are the ones holding all of the aces.

Courtesy of the internet today's customers can quickly search and find vast numbers of alternative suppliers of virtually any product or service and get real-time price comparisons. They don't really care anymore how long you have been in business or how big you are or how many offices you have or what great marketing promise you have come up with. The business climate has changed forever and the balance has tipped firmly toward the buyer and not the seller. Any company that thinks they can force customer loyalty somehow is now completely out of touch. In fact todays buyers can and probably will rebel against them.

If you think it is about price and price and price, then you are wrong. Sure it is a major factor in any buyers decision and every company needs to be competitive to survive however recent research suggests that in this fast paced world we live in people value their time and benefits more than their money.

This is the topic my good friend and mentor, Bob Bloom, has based his latest book "The New Experts" on. Bob has had a lifetime in marketing working for customers such as BMW, L'Oreal, Nestle, Southwest Airlines and little old Skelton Sherborne. Before retirement he was CEO of Publicis Worldwide. His immense experience is second to none and I always enjoy his no nonsense, cut through the crap style. Bob's common sense or perhaps "uncommon sense" approach has been dynamite for my business in helping me attract and retain the worlds leading shippers of heavy equipment and machinery.

I was sincerely honoured when Bob chose to write about some of the initiatives in freight forwarding we have come up with for our clients and even more honoured when he asked me to write an endorsement for "The New Experts".

This book is relevant, enjoyable and a compulsory read for anybody trying to come to terms with the thinking and habits of the new customer.

Bob has been kind enough to give me ten copies of his book. I will send a free copy to the first ten readers that leave a comment at www.TheShippingBloke.com offering a personal experience to the readers of this blog in dealing with the attitudes of todays customers.

If you miss out then you can buy a copy of "The New Experts" here.

All for now,

Brad Skelton

The Shipping Bloke

Thursday, 22 April 2010

Volatile freight rates as shipping recovers from the GFC.

(You are getting this note because you subscribed to The Shipping Blokes Blog by Brad Skelton)

HSBC, the worlds largest bank, hosted a shipping conference on the 29th of March and I thought I'd share some of the information and ideas raised there by ship operators, ship yards, ship brokers and financiers that might be pertinent to followers of this blog. Freight Forwarders, like yours truly, seemed to be absent. The source of this information is HSBC's Shipping Day report.

Overall there was consensus that a slow recovery is underway however many operators are still delivering substantial losses and freight rates, particularly in the container sector, are likely to be very volatile in some trade lanes. I have personally seen this volatility and you have to be right on your game!

The volatility is being caused by carriers who have been hiking rates in order to try and get back into profitability and fluctuations in shipping capacity. Rate hikes the past 6 to 8 months has been due to carriers cutting their capacity as they have laid up vessels to ride out the downturn. The rules of "supply and demand" have kicked in.

Capacity is now growing again though. Some carriers have started reactivating some of the ships they have laid up while at the same time there are new container ships being delivered from the ship yards that were ordered years ago(pre GFC) which are increasing capacity. HSBC report that most of these vessels are destined for Europe/Asia tradelanes. Rates have already dropped by about 10% as a result. Good news for shippers and freight forwarders. Overall it is concerning that there is still massive over-capacity in shipping globally.

We are also seeing the RoRo carriers contemplating bringing more vessels out of "lay up" so I suggest we will see similar volatility in freight rates in this sector soon which is likely to continue until demand and capacity stabilises.

Recovery in the bulker and tanker trades seems be happening faster and in fact the ship yards reported a preference to work in these sectors. The ship yards received almost no orders in 2009 and suffered from substantial deferments of orders as well.

So, all in all, still interesting times for shipping but I am heartened that recovery seems to be slowly underway even if there are still some rough seas ahead for a while.

All for now,

Brad Skelton

The Shipping Bloke.

Volatile freight rates as shipping recovers from the GFC.

(You are getting this note because you subscribed to The Shipping Blokes Blog by Brad Skelton)

HSBC, the worlds largest bank, hosted a shipping conference on the 29th of March and I thought I'd share some of the information and ideas raised there by ship operators, ship yards, ship brokers and financiers that might be pertinent to followers of this blog. Freight Forwarders, like yours truly, seemed to be absent. The source of this information is HSBC's Shipping Day report.

Overall there was consensus that a slow recovery is underway however many operators are still delivering substantial losses and freight rates, particularly in the container sector, are likely to be very volatile in some trade lanes. I have personally seen this volatility and you have to be right on your game!

The volatility is being caused by carriers who have been hiking rates in order to try and get back into profitability and fluctuations in shipping capacity. Rate hikes the past 6 to 8 months has been due to carriers cutting their capacity as they have laid up vessels to ride out the downturn. The rules of "supply and demand" have kicked in.

Capacity is now growing again though. Some carriers have started reactivating some of the ships they have laid up while at the same time there are new container ships being delivered from the ship yards that were ordered years ago(pre GFC) which are increasing capacity. HSBC report that most of these vessels are destined for Europe/Asia tradelanes. Rates have already dropped by about 10% as a result. Good news for shippers and freight forwarders. Overall it is concerning that there is still massive over-capacity in shipping globally.

We are also seeing the RoRo carriers contemplating bringing more vessels out of "lay up" so I suggest we will see similar volatility in freight rates in this sector soon which is likely to continue until demand and capacity stabilises.

Recovery in the bulker and tanker trades seems be happening faster and in fact the ship yards reported a preference to work in these sectors. The ship yards received almost no orders in 2009 and suffered from substantial deferments of orders as well.

So, all in all, still interesting times for shipping but I am heartened that recovery seems to be slowly underway even if there are still some rough seas ahead for a while.

All for now,

Brad Skelton

The Shipping Bloke.

Thursday, 15 April 2010

The Generosity Gene.

(You are getting this note because you subscribed to The Shipping Blokes Blog by Brad Skelton)

I am fortunate to have some incredible friends in Naomi and Peter Simson who founded RedBalloon. Their company is easily the largest online supplier of experienced based gifts. More on RedBallon.

Naomi is a marketing genius, a former Telstra Businesswoman of the year, a Mum and one of the most innovative and out of the box business thinkers I have ever known.

She has recently had the great honour of being invited to speak at a TEDx event in Sydney. Tedx is invites some of the worlds greatest minds in their respective fields to do presentations which are recorded and then uploaded to the net. The thrust of Tedx is to capture amazing ideas and spread them.

So while Naomi's presentation, "The Generosity Gene", has nothing at all to do with shipping, I thought I'd share it with you. I hope you find it as thought provoking and enjoyable as I did.

Congratulations Naomi!

Click here to "The Generosity Gene".

All for now.

Brad Skelton

The Shipping Bloke