A study on the possibility of closer shipper-liner partnership

• Main Authors: Chow, Ai Wai., Koa, Josephine Jia Ling., Tea, Tong Zhou.
• Other Authors: Lam, Jasmine Siu Lee
• Format: Final Year Project
• Language: English
• Published: 2008
• Subjects: DRNTU::Engineering::Maritime studies::Maritime management and business
• Online Access: http://hdl.handle.net/10356/12758
• Institution: Nanyang Technological University

Business arena is continuously evolving and getting even more competitive at the same time. Business strategy of the firms operating in such dynamic environment thus needs to be reviewed constantly in response to those critical developments. Same in the liner transportation industry, liner carriers are also facing fierce competition nowadays. They have been taking various steps to increase their competitiveness in the industry, such as offering more value-added services and integrating into logistics services. However, having stronger and regular cargo base is crucial to justify these capital intensive investments. Hence, drawing closer partnerships with shippers becomes an ideal business model that helps liners to retain and attract customers in this competitive market. On the other hand, transportation requirements of the shippers are also becoming more sophisticated than ever due to growing global production and market places. The needs to compete globally while optimising supply chain efficiency and total profitability have urged shippers to see maritime transportation as a strategic tool rather than a commodity purchase that is used to be traditionally. Building on this fundamental concept, this project takes an important move to investigate the possibility of building closer shipper-liner partnerships. The current working relationships between liners and carriers are studied to acquire a better understanding of the liner industry by conducting qualitative interviews with individual carriers and shippers. The needs that would drive the relationships further towards closer partnerships are also examined from the perspectives of liner carriers and shippers respectively. Furthermore, favorable developments taking place in the liner industry, such as the underlying changes to the use of service contracts and carrier reduction concept, are also observed. These changes are believed to facilitate closer shipper-liner partnerships to form. However, obstacles such as price, lack of continuity and stability, risks of tie-ups and etcetera may discourage such formation. Despite all that, building closer shipper-liner partnerships is believed to be necessary and possible with the evidences of the two case studies scrutinised in the findings. Mutual trust and understanding that derives from the efficient and effective communication is identified as the key to success in building closer shipper-liner partnerships.