Robust growth puts Inchcape Liner Division in pole position

Inchcape’s global liner sector head, Hamish White, has overseen some major wins in the last 12 months despite the pandemic, and nails it when he says ‘building trust through transparency’ is a key factor for liner principals in the third party liner agency and liner husbandry business.

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TAURANGA, NEW ZEALAND – MARCH 6, 2020: Cargo ships docked into Tauranga Harbour Port waiting for the adjacent container cranes to load. Mount Maunganui in the background.

As third-party liner agents Inchcape now services a total of 38 liner principals in 35 countries, while on the containership husbandry side it provides skilled support for some 30,000 port calls worldwide. Its customer base features many of top lines listed in Alphaliner.

Hamish White, Inchcape’s liner figurehead since 2017, says the company has seen good growth in Liner across the board and has been busy employing new people in multiple locations. “Over the last 12 months we have secured some significant agency appointments and husbandry contracts”

Recent third-party liner agency business includes new wins in USA, Costa Rica, Guatemala, The Bahamas, Tanzania, Russia, Cambodia, Australia and New Zealand. Their NVOCC business in region MESSA also continues to go from strength to strength with pleasing developments in UAE, Kuwait, Egypt, Saudi Arabia, Oman and East Africa.

On the Liner Husbandry front Inchcape has seen significant growth in locations such as Australia, Singapore, Malaysia, Taiwan, USA, Panama, India, UAE and Africa region. “Despite the ravages of the pandemic it is great that our customers entrust Inchcape to handle their vessels and crew. We are acutely aware of care for seafarers during this time and we have some fantastic operational staff around the world making items such as crew change and medical care as efficient as we possibly can despite the restrictions caused by the pandemic”

Compliance in the spotlight

Inchcape’s focus is on nurturing long-term relationships with principals based on first-class communication. “Our top priority as a global marine services provider is corporate compliance. We work hard to build trust through transparency and customers can rest assured we operate with an open book. That really sums up what’s required in this industry,” White says.

Adding strategic value

He explains there are three primary reasons for a shipping line to appoint Inchcape as third-party agent in a specific location. The first is if the country or port is new for the line and it doesn’t have a local presence. “With our local knowledge and experience we can provide fast strategic market insight to build their service strategy. By that I mean trade statistics, an overview of relevant commodities and commodity flows, freight-rate data and analysis,” says White.

Inchcape helps the principal to eliminate risk, seize commercial opportunities and make the right decisions. “We build strong management and teams on the ground, from sales, customer service to operations and finance, and act for the principal as, in effect, their own branch. Our ability to expand TEU market share and revenue for the line is ultimately what we’re scored on.”

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Le Havre, France – June 13, 2021: Panoramic view of the Rene Coty basin with the Guayaquil Express container ship, from Hapag-Lloyd shipping company, docked and the EDF coal-fired power station.

Challenging locations and outsourcing admin

The second reason lines approach Inchcape is that the country they are considering is challenging to operate in and they can benefit from Inchcape’s local savvy. “Papua New Guinea springs to mind, which is rich in shipping but at the same time can be quite tricky. It was my first overseas posting for Inchcape and at that time we represented Maersk as 3rd Party agent. It was a challenging but hugely rewarding experience. We’ve have also operated strong and efficient 3rd party liner agencies in countries such as Pakistan and Iraq, “says White

The third reason a line will come to Inchcape is to handle non-strategic administrative functions in a given location. This is typically because their business isn’t large enough to warrant setting up their own office to handle back-office documentation, bills of lading, container control and so on. “Lines generally prefer to do this in-house but various locations around the world don’t want the cost of employing staff. In which case it’s more cost-effective to outsource to Inchcape because of our economies of scale.

Tackling Covid

White adds that the onus is on Inchcape to provide continuity of service, which it has managed to do throughout the pandemic despite some serious challenges. “We choose our people carefully and they’re great at thinking on their feet to find creative solutions.”

Liner Husbandry and Consolidated invoicing

On the husbandry business side Inchcape offers the full range of services from crew change, cash to master, transport, medical, spares delivery, bunker and vessel survey to depot operations, tally. “We offer regional deals on husbandry with an agreed menu of rates. Our single invoicing framework also vastly simplifies the PDA process, facilitating not only transparency and efficiency but also uniformity in KPI analysis and reporting. Customers get a single end-of-month invoice instead of having to approve invoices for every individual port call. They can request an audit whenever they want within a six-month period, which also builds trust,” he adds.

In addition, building regional deals with Inchcape means customers get a worldwide agent they can depend on, versus the inconvenience of dealing with a string of separate ‘mom and pop’ agents in different places. Inchcape’s strong Procurement Division also ensure customers get the best price for local services, while reducing the total number of vendors through Inchcape coverage also helps to lower overheads.

Ambitious forward targets

Within the next few years White expects to secure new agency business in Pakistan, Saudi Arabia, Myanmar, Bangladesh, Indonesia, the Americas, Europe and Africa – basically everywhere. “We aim to grow from 2.5 million TEU per year now to 3.0 million TEU and above. We also want to grow our husbandry numbers to 40,000 port calls globally in the next 2 to three years,” he says.

Geographically he is very excited about current and future developments in Africa and the Americas, as well as Southeast Asia and Europe.

White cautions that although container shipping is right now enjoying a 10-year high, with very strong freight rates, in the bad times lines often make only marginal profits, break even or even incur losses. “Inchcape’s competitive advantage during down cycles is our ability to save customers money and spot areas which perhaps could be improved. Both port-call husbandry and liner agency are about inspiring confidence and achieving customers’ commercial goals over and above expectations. We stick at it through thick and thin,” he says.