newstodate.aero
Feb 27, 2015 (newstodate): Shippers' increasing use of tendering their airfreight traffic is a curse on both forwarders and airlines.
This is a trend in many markets, including the Danish industry.
-We see this trend spreading and growing, says John Sorensen, Danish Freight Forwarders Association, chairman of the airfreight group and DHL Global Forwarding Strategic Customer Manager in Denmark.
-The large shippers open tenders every second eyar based on what I would not hesitate to call unfair requirements in an undisguised effort just to cut prices.
-Notably some of the major companies in Western Denmark open tenders while reserving the rights to go outside the contract for alternative competing bids in case of shipments above one tonne. And smaller companies even tender shipments of 100 kilo among four of five forwarders to land the lowest possible rate.
-There seems to be no respect for the large, unpaid work invested by forwarders to respond to tenders that may then even be easily side-tracked after signing of contract with the "winner", says Mr Sorensen.
-Add to this also the fact that in most cases tenders comprise demands for credit periods up to 60 or even 90 days, while it is well known that forwarders must pay airlines within running month plus 30 days only.
And his experience is shared by at least one major airline executive in the Danish market who prefers, though, to remain anonymous.
-In most cases, large exporting companies in these markets tender their contracts every two years, and I seldom see requirements on enhanced service quality coupled with a corresponding willingness to accept higher rates, the airline executive says.
-Reigning supreme is the issue of low costs leading to a downward spiraling of air cargo rates in the markets. And this process is now really hitting rock-bottom levels.
This is a trend in many markets, including the Danish industry.
-We see this trend spreading and growing, says John Sorensen, Danish Freight Forwarders Association, chairman of the airfreight group and DHL Global Forwarding Strategic Customer Manager in Denmark.
-The large shippers open tenders every second eyar based on what I would not hesitate to call unfair requirements in an undisguised effort just to cut prices.
-Notably some of the major companies in Western Denmark open tenders while reserving the rights to go outside the contract for alternative competing bids in case of shipments above one tonne. And smaller companies even tender shipments of 100 kilo among four of five forwarders to land the lowest possible rate.
-There seems to be no respect for the large, unpaid work invested by forwarders to respond to tenders that may then even be easily side-tracked after signing of contract with the "winner", says Mr Sorensen.
-Add to this also the fact that in most cases tenders comprise demands for credit periods up to 60 or even 90 days, while it is well known that forwarders must pay airlines within running month plus 30 days only.
And his experience is shared by at least one major airline executive in the Danish market who prefers, though, to remain anonymous.
-In most cases, large exporting companies in these markets tender their contracts every two years, and I seldom see requirements on enhanced service quality coupled with a corresponding willingness to accept higher rates, the airline executive says.
-Reigning supreme is the issue of low costs leading to a downward spiraling of air cargo rates in the markets. And this process is now really hitting rock-bottom levels.