How's it going? Shippers aren't sure

By Staff -- Logistics Management, 6/1/2000

There's no doubt that the Ocean Shipping Reform Act of 1999 (OSRA) will bring sweeping changes to the ocean shipping industry. With so much at stake, industry participants are understandably anxious to keep up with developments. As a result, OSRA has spawned a number of surveys on how the law is affecting shippers.

In October 1999, forwarder BDP International published the results of a survey of more than 1,000 of its customers. That survey found that although 48 percent of respondents said they believed that the rate confidentiality promised by OSRA was very important, less than one-third (29 percent) said they believed confidentiality was achievable. Many respondents seemed to be unsure of how to respond to OSRA's opportunities; when asked what changes they would need to make to take full advantage of the law, more than half failed to respond. Sixteen percent said no changes would be needed, and 10 percent admitted that they were unsure. Those who did respond positively said they would need to shop for rates, enter into more contracts and relationships, and hire new people.

When asked about the greatest challenges they would face under OSRA, more than half did not respond, 8 percent said no change would be required, and 9 percent said they were unsure. Those who did respond most often cited obtaining/maintaining competitive rates, staying aware of pricing information, and maintaining confidentiality.

In April, research firm Manalytics International and Tradiant, an online transportation marketplace, said that their survey of 210 shippers and forwarders found that most shippers were still contracting for ocean freight services just as they did before OSRA. About 60 percent of those respondents still squeezed their contracting into a four- to six-week period. Nearly half said that they were dissatisfied with that process. The survey also found that a carrier's "brand" was important to only 36 percent of the respondents. In other words, shippers are less likely to be loyal to a carrier because of intangibles like reputation and past history, and are more focused today on negotiable considerations like price.

Yet another survey is in the works. The National Industrial Transportation League, which represents large shippers, has placed a 34-question survey on how OSRA is performing on its Global Shippers Network Web site (www.globalshippersnetwork.net). The questionnaire asks shippers about service contracting practices, use of confidentiality provisions, effects on global trade, and effects on various transportation parties. All shippers are welcome to participate.