Bargaining Power Of Supplier
Bargaining Power of Supplier
Suppliers barely make any difference to companies involved in shipping line business, especially who are leading players like “Maersk” in this business. While it may affect to certain extent to small players like Five star shipping company, Varun Shipping company etc. who are struggling to establish within the industry. Many suppliers are such which are borne directly by customers but arranged by shipping lines like pesticide, wooden pallets, container repairs and truck transportation due to corporate contract or link ups of companies with service providers. While there are cases when these same services are borne by shipping lines but then these charges are included in freight rate which would be higher if the suppliers were not arranged by company. “Maersk” supply service expects a lower result than in 2010 due to lower contract coverage and weaker spot market rates than at the beginning of 2010.
Another supply which is related to loading of containers on third party vessels is very important here because this is the only supply where shipping lines have to face the bargaining of suppliers. Not all shipping lines own the vessel and therefore they hire the service of other companies, to load their containers for different destinations. “Maersk” is the largest container operator in Kandla port. But its own vessels are not operating from Kandla due to drift problem and therefore they hire the services of third party feeder vessels to load its containers till JNPT [Jawaharlal Nehru] port in Mumbai, from where “Maersk” mother vessels are operating across continents. In this case “Maersk” may have to pay extra money if demanded by ship operators. While this is not the case with MSC [Mediterranean Shipping Company] which has its own small vessels operating from Kandla to different gulf locations. But if we move to location like JNPT port in Mumbai, the situation is totally different. “Maersk” vessels are the biggest here operating among
Suppliers barely make any difference to companies involved in shipping line business, especially who are leading players like “Maersk” in this business. While it may affect to certain extent to small players like Five star shipping company, Varun Shipping company etc. who are struggling to establish within the industry. Many suppliers are such which are borne directly by customers but arranged by shipping lines like pesticide, wooden pallets, container repairs and truck transportation due to corporate contract or link ups of companies with service providers. While there are cases when these same services are borne by shipping lines but then these charges are included in freight rate which would be higher if the suppliers were not arranged by company. “Maersk” supply service expects a lower result than in 2010 due to lower contract coverage and weaker spot market rates than at the beginning of 2010.
Another supply which is related to loading of containers on third party vessels is very important here because this is the only supply where shipping lines have to face the bargaining of suppliers. Not all shipping lines own the vessel and therefore they hire the service of other companies, to load their containers for different destinations. “Maersk” is the largest container operator in Kandla port. But its own vessels are not operating from Kandla due to drift problem and therefore they hire the services of third party feeder vessels to load its containers till JNPT [Jawaharlal Nehru] port in Mumbai, from where “Maersk” mother vessels are operating across continents. In this case “Maersk” may have to pay extra money if demanded by ship operators. While this is not the case with MSC [Mediterranean Shipping Company] which has its own small vessels operating from Kandla to different gulf locations. But if we move to location like JNPT port in Mumbai, the situation is totally different. “Maersk” vessels are the biggest here operating among