Episode Transcript
[00:00:03] Speaker A: You are listening to the Freight Buyers Club, a home for those interested in international trade, shipping, procurement, logistics and air freight. In fact, all things supply chain in the Americas, Asia and beyond. This podcast is brought to you by your host, Mike King and produced in partnership with Demurco Express Group, a global 3 PL that specializes in managing logistics to from and within the Asia Pacific region.
[00:00:30] Speaker B: Hello, Mike king here at TPM25 and I'm joined today by the CEO of Claphag Lloyd is Rolf Aban Jansen. Hello Rolf, how are you?
[00:00:38] Speaker C: I'm good, thank you. Yourself?
[00:00:40] Speaker B: Very good. Are you enjoying the show so far?
[00:00:42] Speaker C: Well, it's still early days on Monday morning at. What is it, 8:30. So we'll see.
[00:00:47] Speaker B: I'm not sure what. I don't even know what time zone I'm on at the moment. A quick question for you. I first interviewed you when you were the CEO of Damco and I think I'm maybe 15 years ago or something. I look at the strategies of a lot of container lines and a lot of them are moved into sort of integrators. They're building up their logistics footprint. You're probably the only one that's come at our industry from that direction and also one of the only carriers that doesn't seem to be going down that strategic route. Do you know something that everybody else doesn't?
[00:01:18] Speaker C: No, I certainly don't. I think it's good for the customers that there's choices and that not everybody has the same strategy. I think even if you look a bit more in detail at the strategies of Maersk and CMA and MSC and us and others, I think there are more differences than. Yeah, than you would see at first glance. We've always said that we'd like to be a good shipping line and like to provide really good quality to the, to our customers. And that's what we're trying to do. And we don't think that we necessarily need to offer all the end to end logistics services.
[00:01:46] Speaker B: What are your investment priorities this year and beyond?
[00:01:49] Speaker C: I think our investment priorities will remain around chips. Of course there will also be on the terminal front. And in addition to that we invest in education and it.
[00:01:59] Speaker B: You mentioned services for customers. You are now in the Gemini cooperation with Maersk. How's that going? When do you expect to hit these 90% reliability levels? And is this something that shippers and forwarders have been asking you for?
[00:02:11] Speaker C: Of course, people have been asking for that for a long time. I think it's not for nothing that the industry has had Such low schedule reliability. In Gemini, we've certainly been off to a good start. At the moment we have about one third of the ships phased into their new service structures. We've done about 500 port calls so far and we're pretty close to that 90% schedule reliability that we have promised. It will take some time before that fully stabilizes. We've always said it takes probably two cycles and I would still stick to that. So I think that when you look at the second half of this year, we should be able to get to those targets or at least very, very close to it.
[00:02:48] Speaker B: And this is something that shippers and your customers want. Will they pay for it? Will they pay extra for it?
[00:02:55] Speaker C: I think in the end, if you have the choice between a product that is very reliable and cost competitive and you have choice for another product that is less reliable, then in the end I think people will always pay us a fair price. And probably over time that's going to be a little bit higher than what they pay if reliability is not there. Because they will be able to take inventory out of their supply chain. And that means that there is value that can be shared between parties.
[00:03:20] Speaker B: Some shipping critics have said that the big risk with the hub and spoke system is the feeder element. A, are you confident that they're wrong? And B, the other criticism has been that this sort of network, the way that you're setting up the old school Helvensbo, actually just suits your fleets because you haven't got enough. Enough ships to do anything else. Are they wrong on both counts?
[00:03:41] Speaker C: Well, I mean, the fact that we don't have enough ships for anything else, that is definitely wrong. Yeah, because you don't necessarily need less ships. You just need. You use your big ships more efficiently. And in addition to that, then you also deploy smaller ships for the, for the shuttles and the feeders. On the feeders, I think people tend to think about third party feeders which indeed have an issue around reliability. But that's also one of the key changes that we have made in Gemini is that most of the shuttles and the feeders are actually operated either by Maersk or by Hapag. And that will help to bring the reliability also of the shuttles and the feeders up compared to what people are used to.
[00:04:19] Speaker B: We're here where a lot of the negotiations around Trans Pacific contracts take place. There's so much uncertainty out there. Tariffs, we don't know what's going on in Suez. Even earlier this year we had the threat of a US east coast port strike. With all that uncertainty, are shippers reluctant to commit volumes? And how does this just general confusion, how does that affect these negotiations?
[00:04:41] Speaker C: I mean, there's always uncertainty in the market and maybe there's a little bit more this year than there is in normal years. I would still say, though, that the negotiations are pretty much normal. And and I think we see a wide spectrum when you look at the customer. Some want to commit early and want to lock in volume, whereas others want to wait a little bit longer and want to decide later. On the whole, I would say, though, that people have decided a little bit earlier this year than last year.
[00:05:06] Speaker B: For example, we're back to a traditional peak season then third quarter, difficult to judge.
[00:05:12] Speaker C: I mean it always comes a little bit earlier or later, no matter when you but always a little bit different than you expect. But if we look at the last couple of years, I think 23 was pretty normal. Last year the peak season was a little early, which because of the potential strike in the US in autumn, was not unlogical. I expect this year that it looks a bit more normal as Halloween and Thanksgiving and Christmas will still be on their traditional dates.
[00:05:38] Speaker B: Spot rates have been subsiding slightly since the Lunar New Year period. Where are those contract levels coming in compared to, say, last year?
[00:05:46] Speaker C: Too early to say. I think we have seen the typical seasonal effect on spot rates, but let's see where the rates settle in the end. I think if we look at the early contracts, then those have definitely been.
[00:05:58] Speaker B: Up versus last year and a final one. Rolf, how are you helping customers navigate tariffs? Because there's so much we don't know about them and when they'll happen and how big they'll be.
[00:06:07] Speaker C: I mean, there's only so much that we can do. I think we monitor the news like everyone else and we try to give people information as good as we can. But as you say, there's a lot of things that are fairly unpredictable also for us, and that's where we can unfortunately only provide people with the information that we have. And we don't have more information than is in the public domain.
[00:06:29] Speaker B: Rolf Haman Janssen, thanks for joining me today on the Freight Buyers Club.
[00:06:32] Speaker C: You're welcome.
[00:06:35] Speaker A: We hope you enjoyed this episode of the Freight Buyers Club, produced in partnership with the demurco Express Group. Please subscribe and follow on your platform of choice or sign up for delivery to your inbox@the freightbuyersclub.com this podcast wouldn't have been possible without the fantastic editing of Karen Ball and Tom Matthews and finally, thank you all for listening. The next episode will be with you soon.
