Drewry helps small shippers in block buying to win lower rates
THE recent launch of Ocean Buying Group (OBG) intends to confer greater bargaining power on small shippers, who pay more and get less from carriers than bigger shippers do
THE recent launch of Ocean Buying Group (OBG) intends to confer greater bargaining power on small shippers, who pay more and get less from carriers than bigger shippers do.
London's Drewry Supply Chain Advisors is assisting the process with a new partnership with Chainalytics in OBG.
Drewry director Philip Damas told London's Loadstar that OBG has already managed to procure 100,000 TEU from small shippers over a six-month pilot period.
'Typically, Ocean Buying Group has been able to secure rates that are roughly US$200 lower than a SME shipper is likely to get on his own,' said Mr Damas.
This is a completely innovative way of procuring capacity and a boost for SMEs having a tough time negotiating as lone entities, he said.
'We buy capacity from the carriers using the leverage we have in terms of shippers signed up to the OBG, and then the shipper signs on as an additional party to benefit from fixed rates,' said Mr Damas.
'After this, the shipper goes direct to the carrier, buys capacity and is invoiced for the space through them, without us taking a cut.'
But one industry source doubted OBG would be able to swing this larger block buy into a deal for the low rates enjoyed by major shippers, as well as forwarders, who have long wielded their collective cargo clout to wring better deals from carriers.
'It is a good idea in theory,' he said, 'but I wonder how it will work in practice. I can see the carriers running with this; they already have enough big boys trying to screw them on rates.'
He also said that shippers may have concerns over transparency and whether their boxes would be more likely to get rolled in favour of those of the larger players.
But Mr Damas disagreed. 'Total volume is what matters to the carriers and 100,000 TEU - it doesn't matter if it's aggregated from various shippers.
'And 100,000 TEU undeniably counts as a big volume, so I do not think there will be any suggestion that shippers may find their goods stranded,' Mr Damas said.
Looking to the future, Mr Damas said the group had no target set, but it was certainly looking to both broaden its horizons and increase the number of shippers signed up.
He denied that the consultancy and research organisation would have any conflicts of interests in getting involved with booking capacity, noting that Drewry already offered services such as benchmarking, and this would complement such offerings.
'We do have some research facilities, but our main interest is advising companies,' he said.