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Assessing the intermodal value proposition of shipping lines: Attitudes of shippers and forwarders

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Abstract

Shipping lines generally offer their clients two main value propositions: port-to-port and door-to-door transport. In addition, some shipping lines offer a third value proposition in the form of transport up to inland terminals (ILTs). This third value proposition combines maritime and inland transport and is offered to two types of customers: shippers and forwarders. These two customer groups have different positions in the supply chain. It is therefore expected that shippers and forwarders have different attitudes towards the intermodal value proposition and the service offering of shipping lines in general. In this article we analyse how shippers and forwarders assess the value propositions of shipping through a survey among shippers and forwarders in the Netherlands. We found that shippers and forwarders differ in what they find important in the service offering of shipping lines, that they differ in the share of value propositions they source from the shipping lines and that for both shippers and forwarders the value proposition centred around an ILT is of added value.

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Notes

  1. An ILT-centred proposition is also offered in other parts of the world. For instance, shipping lines provide door-to-door services in North America, but also offer services to/from container yards. In contrast to Europe, carriers have a larger role inland in North America. Heaver (2002) found that all major lines offer intermodal services for shippers in North America where conditions have been favourable to the development of long-term contracts for effective rail service.

  2. CY stands for container yard.

  3. The operational rationale for inland activities of shipping lines is less strong in regions with large ‘transloading volumes’ where the cargoes of maritime containers are loaded in continental trucks that can carry larger volumes.

  4. Empty movements are generally not time sensitive and can be allocated last minute to services, allowing the operator to increase utilization. The same applies, but to a lesser extent to carrier haulage containers as shipping lines often have some slack regarding the final delivery time and thus some flexibility in allocating containers to intermodal services.

  5. One could argue that slow steaming, with a negative impact on the transit times, shows that both shipping lines and their customers are more cost oriented than value oriented.

  6. Scale economies are also important for inland transport (see, for example, Woodburn, 2011). For instance, a higher frequency or larger scale of trains and barges translates directly in lower costs. Thus carriers, that potentially control huge volumes, can create value in inland transport.

  7. Even though we treat ‘forwarders’ as a homogeneous group, they are not. For instance, Lai et al (2004) distinguish four different types of freight forwarders: traditional freight forwarders, transformers, full service providers and nichers. Similar typologies of forwarders have been also discussed by Juga et al (2008). Likewise, shippers are far from a homogeneous group. Tongzon (2009) distinguishes three types of shippers: shippers that sign long-term contracts with shipping lines, shippers that are using freight forwarders and shippers that are independent (and frequently tender their container transport). Exploring carrier selection processes of these different types is interesting and relevant, but beyond the scope of this article.

  8. Some shipping lines (such as Maersk, APL and NYK) have developed an independently operating subsidiary that provides logistics services such as warehousing services. Some of these subsidiaries (such as APL Logistics) operate as a freight forwarder. However, such a set-up does not allow for synergies. This may explain why other shipping lines (for example, Maersk Line) offer door-to-door services themselves, but have a subsidiary that provides warehousing and other supply chain services (Damco, also a part of AP Moller).

  9. We excluded a potential source of differentiation (that is, providing door-to-door transport) as this conflicted too much with the interest of the forwarders. We also made the introduction for the question regarding the transport service that combines a sealeg and intermodal landleg more neutral (that is, we deleted the term shipping line and only mentioned that container transport mainly provided on a port-to-port or door-to-door service).

  10. In the questionnaire of the shippers, before we posed the statement on the experiences with intermodal transport we filtered out the shippers that did not made use of intermodal transport, which were 17 out of 48.

  11. r=−0.226, significance 0.018, two-tailed, with α=0.05 for port-to-port and r=0.194, significance 0.042, two-tailed, with α=0.05 for door-to-door bookings.

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Acknowledgements

This research would not have been possible without the support of FENEX and EVO. We are very thankful for their time and cooperation. Furthermore, this research is supported by the Dutch Institute for Advanced Logistics (DINALOG) and is part of a research project on efficient multimodal hinterland networks.

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van den Berg, R., de Langen, P. Assessing the intermodal value proposition of shipping lines: Attitudes of shippers and forwarders. Marit Econ Logist 17, 32–51 (2015). https://doi.org/10.1057/mel.2014.11

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