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Beating cancellation - over booking conundrum: APL says it has a new way

DESPITE a sorry record and many doubts, APL says it is confident that its recently-announced guaranteed service, shippers and carriers will at last solve the over booking and cancellations problem that had dogged the industry since Noah's time.

The age-old debate about how to deal with overbooking and cancellations has resurfaced after many frustrated carriers have imposed cancellation fees, reported American Shipper.

Ameliorations have been tried to end the costly inconvenience, from a blockchain reservation system to a contract-based percentage fees hitting both shippers and carriers who default.

But do container no-shows induce carriers to overbook, or do carriers overbook to induce shippers to engage in multiple bookings that they then fail to cancel?

As APL sees it, a better way exists, that is, have the industry overcome this chronic misbehaviour and operate more efficiently.

Despite the cycle of fees, penalties and contracts, the no-shows versus rollovers - the problem festers to where APL will launch a special guaranteed service in early November.

But as American Shipper noted, previous efforts by Maersk to guarantee space for a price on specific routes proved unsuccessful.

Knowing this, APL's Mr Sartini is still confident, saying his new service will differentiate itself from rivals, paramount in an industry that is quickly commoditising itself in mega-alliances.

Said Mr Sartini: "We need to be more imaginative. This is what we are trying to do with our Eagle Guaranteed programme."

He admitted pricing was still a problem. "Many just want their cargo delivered at the best possible price. Then you have the shipper, who can gain a few days on the delivery time and is prepared to pay a premium. That is why we have expanded the Eagle programme, because we have seen from the market that there is a demand for this service.

"Of course, the guy who ships two containers won't be interested, because he doesn't need it. But for those customers with a sophisticated supply chain, we want to make sure there is a just-in-time delivery that they are prepared to pay for."