The relationship between shipowners and cargo agents is critical to the movement of goods around the world.
However, in recent years this relationship has undergone significant changes. With the advancement of technology and increased competition, shipowners have sought to establish direct relationships with shippers. Leaving the cargo agents, thereby, in the background.
Read also: Shipowner X Cargo Agent: Which of these to choose in an international freight quote?
In this context, the question arises: what will be the future of this relationship? Will cargo agents still have a relevant role in the freight transport process? This text will explore the challenges and opportunities that arise in this scenario. In addition, discuss possible paths to the future of the relationship between shipowners and cargo agents.
What are shipowners and cargo agents?
Before we discuss the relationship between shipowners and cargo officers, it’s important to understand what each of them does.
Shipowners are owners of ships or companies operating ships to transport goods around the world. They are responsible for the maintenance, crew and operation of the ships.
Cargo agents, on the other hand, are intermediaries between shipowners and customers who wish to ship goods. They help customers find the best shipping service for their needs and coordinate the shipment of goods from one place to another.
In addition, they are responsible for managing the logistics of transportation and ensuring that the goods reach their final destination safely and efficiently.
Source: https://www.freepik.com/free-photo/aerial-photography-container-terminal_15220926.htm
Why is there a competition between shipowners and cargo agents?
The competition between shipowners and cargo agents comes from the same goal. Both invest heavily in technology, have solid knowledge in international logistics and, in addition, offer these resources aiming profit and sales to the same buyers.
Choosing between shipowners and cargo agents is a very particular attitude because it is fully conditioned to the specific needs and demands of each buyer.
To be clear and assertive in this choice it is necessary that the buyer has the willingness and interest to seek forms and resources. After all, this will allow us to understand what each one accomplishes and can offer. However, this task should be aligned with the understanding of what is the demand and needs that one has.
Partnership relationship or rivalry between shipowners and cargo agents?
This is a question whose answer can be dynamic. Both situations can occur between shipowners’ relationships with cargo agents and vice versa.
The fact that conditions this response is by how rival or partner will be the relationship between shipowners and cargo agents, which depends on the market moment and the internal moment of each of them.
Thus, at times when the local market is turbulent or suspicious of new entrants or with foreign companies, the relationship between shipowner and cargo agent may be partner, because the shipowner wants to sell the transport service and the agent wants to profit from a mediation in which he knows that the two interested parties (shipowner and exporter or importer) will not be able to maintain a dialogue.
The opposite is also true, situations in which the cargo agent – due to their local knowledge or ease of communication – has a huge demand of its customers added together – so that these customers, individually, are not attractive to the shipowner – the relationship between cargo agent and shipowner can be partnership.
The opposite of the situations mentioned above, resulting in rivalry, are also common.
When, for example, major global markets are in recession, when there are impacts by political decisions or military conflicts, customer search obviously becomes more difficult and so competition between companies that provide the same service or material tends to be more fierce.
Source: https://www.freepik.com/free-photo/covid-19-global-economic-crisis_11071689.htm
Door to Door operation by Shipowners
Shipowners are increasingly committing themselves to the satisfaction of all the needs of their customers. This means that activities such as customs clearance, which is usually performed by a dispatcher, is a service also offered by shipowners recently.
This is just one example of the initiatives that shipowners are willing to undertake to stop being seen only as a shipping carrier. On the other hand, they are now seen as a professional logistics solutions company.
To this end, several M&A (Merge & Acquisitions) initiatives have been undertaken by shipowners in recent years, a recent example is danish shipowner Maersk’s acquisition of German global cargo agent Senator International. Movements like this are normal in all sectors of the economy, here, however, we can understand the reasons for such an attitude.
Major mergers
In this sense, merger initiatives between shipowners and cargo agents have been modeling the level of service of logistics solutions. However, it has also reduced the level of competition in the regions.
Examples are the transactions between the Danish cargo agent DSV and the Kuwaiti GIL Agility, between the French shipowner CMA-CGM and the Chinese evergreen, as well as, in the past, the German Hamburg Sud and the Brazilian Alliance etc.
Ocean Alliance
After a wave of consolidation in the global logistics services sector between 2016 and 2017, the six major shipping companies – which together hold more than 70% of global shipping capacity – have consolidated into three operational alliances, 2M – between MSC and Maersk; the Alliance – between Hapag Lloyd, NYK, Yang Ming, MOL, K-Line and HMM; and Ocean Alliance – between CMA-CGM, Cosco Group, OOCL and Evergreen.
About the Ocean Alliance, specifically, it intends to ensure for the four of the alliance – which are among the 10 largest shipping companies – the participation in the world’s most expansive maritime alliance by capacity today, this at a time when new entrants seek to enter the global market voraciously.
Source: https://www.pexels.com/pt-br/foto/barco-de-agua-branca-753331/
What are the future trends in the relationship between shipowners and cargo agents?
The future of the relationship between shipowners and cargo agents is uncertain, but there are some trends that are becoming increasingly clear. One trend is the increase in automation and digitization of the shipping industry. Digital platforms and artificial intelligence are making the process of shipping goods more efficient, which can lead to a reduction in demand for cargo agents.
However, the need for logistics management and transportation coordination will not disappear completely.
Some experts believe that the relationship between shipowners and cargo agents can evolve into a more collaborative partnership, with cargo agents providing value-added services such as inventory management and shipment tracking.
Count on Cheap2ship to decide who your cargo will board with
Technology is rapidly changing the shipping industry, which could lead to changes in the relationship between shipowners and cargo agents in the future. However, the need for logistics management and transportation coordination is likely to continue, and the relationship between them evolves into a more collaborative partnership.
That’s why Cheap2ship is the best solution for your international transportation needs, whether it’s your choice to work with shipowners or cargo agents, because we are independent and able to consolidate essential information about operation, time and costs from your suppliers quickly and easily.
Visit our website and chat with our experts!
