Dive Brief:

• The survival of terminals amid ongoing lowball price practices by shipping lines have many concerned, The Loadstar reported recently.
• Shippers are reporting dissatisfaction with vague, unfounded additional charges levied by shipping lines seeking to survive in an overcrowded market.
• Meanwhile, truckers and transportation experts are exasperated as well by unreasonable fees charged for situations beyond their control, such as poor weather delays, labor disputes, or line failures, as in the case of Hanjin.

Dive Insight:

In the midst of a contracting industry where cost-cutting and increasing surcharges on the margins is the new norm, the question is, how far can an industry go down that path and still survive?

With transport prices at rock bottom, shippers are looking to recoup costs any way way they can, including tacked on charges for incidents that are largely beyond their customers' control, as well as surprising additional surcharges that appear. Add to that their demands for discounts at ports and terminals and you create a never ending cycle of rising costs and pinched margins in an already distressed industry. 

In the case of ports and terminals, the result may be a reduction in safety when owners cannot afford to maintain equipment or offer the necessary oversight in operations. Going low can cause unintended negative consequences on provision updates. Accidents and unforeseen events are never affordable, but with the decreased profit margins that are manifesting through cost-cutting and increased surcharges, companies will be brought to the point of breaking, even before something actually breaks.