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Deutsche Post-DHL’s forwarding operation has stated it will cover extra costs for customers that wish to specify that less-than-container load (LCL) cargo be carried on vessels using biofuels or other reduced emissions technology, Shipping Watch reports. The shipping industry is starting to invest in GHG reducing technology which will incur higher costs, as outlined in Panjiva’s research of Feb. 18.
Customer willingness to pay is of course a challenge but many firms are already set to make such commitments. DP-DHL’s exposure to the extra costs isn’t known yet, but limiting the offer to LCL shipments only will reduce its exposure. Panjiva’s data shows that 28.7% of DP-DHL’s U.S. seaborne import handling in 2020 were LCL by number of shipments though that equated to just 3.2% by volume of containerized freight.
At the industry level the LCL segment has grown more quickly than the full container load (FCL) space during the pandemic with total U.S. LCL imports rose by 53.1% year over year in Q4’20 while FCL rose by 15.8%. In DP-DHL’s case that has not occurred. U.S. imports of LCL traffic grew by 14.6% year over year in Q4’20 while the number of FCL shipments increased by 17.0%. That gap has widened further in January with DP-DHL’s LCL shipments up by just 6.7% while FCL rose by 27.4%.
Source: Panjiva
While the emissions cost offer is clearly designed to attract new customers, DP-DHL’s existing LCL customers will also likely want to take advantage. Customers that have cut back their shipments with DP-DHL would be the most logical early candidates for the product.
In the capital goods sector Panjiva’s data shows imports handled for Caterpillar and Honeywell declined by 47.9% and 40.7% respectively in the three months to Jan. 31 while those shipped for Metso Outotec declined by 17.8%. In the technology sector shipments handled for CommScope fell by 61.0% and while shipments for Cisco Systems rose by 40.5% they have reversed by 36.1% in the month of January alone.
Source: Panjiva
