Shipping Industry Aims to Minimize Booking Cancellations

Posted by

For years carriers have attempted to sanction container no-shows with a fee, but none have stuck.  Last minute cancellations have plagued the shipping industry, preventing carriers from accepting bookings from their customers. The lack of a cancellation fee encourages shippers to be disorganized and careless with their shipment dates. In an attempt to change this, several carriers have decided to impose a fee for last-minute cancelled bookings.

On June 1st, CMA CGM was the first carrier to impose a booking cancellation fee. It consists of $150 per twenty-foot equivalent unit (TEU) for all bookings cancelled or transferred within seven days of the vessel cut-off date. The fee will affect North Europe to Red Sea, Middle East, India, Pakistan, and Sri Lanka. The fee will aim to increase booking reliability in order to efficiently allocate space and equipment to better serve customers’ needs.

Hapag-Lloyd has joined CMA CGM in charging a booking cancellation fee for shipments from Singapore to India. Hapag-Lloyds’ $60 fee is substantially less than CMA CGM’s in an attempt to keep existing customers, while cutting losses from last minute booking cancellations. Robbert Van Trooijen, Maersk Line’s Asia Pacific CEO, said cancellations could reach as high as 30 percent in Asia and was “one of the key issues impacting our ability to deliver a reliable product to our customers.”

In an effort to standardize and increase accountability to the industry, the New York Shipping Exchange (NYSHEX), has launched an online cargo booking platform. Shippers, carriers, and forwarders will essentially own these slots, allowing them to buy and sell them through the portal. The platform will penalize for non-deliveries on both sides: the carrier and supplier. Through a cancellation fee or a standardized operating platform, regulation and transparency are both needed in this industry.

Juan Lacouture for the South Florida District Export Council