GAC says altering shipping agency landscape can benefit all

03 October 2004 - Global shipping and logistics company, GAC Group, says that a paradigm shift in shipping agency services is now taking place as Principals look towards using HUB agents as an extension of themselves in ports worldwide.

Stressing that this trend will grow rather than diminish, in his paper presented today at the ITIC Forum at the Dorchester Hotel in London, Captain Matthias Imrecke, General Manager of GAC Global Hub Agency Services, encouraged local shipping agents to work closely with HUB agents for an all-round profitable scenario.

Captain Imrecke's paper "HUB Agency: A Threat To Your Business or An Opportunity?" points out that HUB agents' services have been offered to shipping Principals since the '90s.

Shipping principals today demand more than just the basic agency services provided by shipping agents in the past. They now want a myriad of tasks performed, including financial management of funds, port operation supervision, constant updates of current port information, crew movement supervision, voyage management functions, bunker supply management, total logistics solutions, and - most importantly - interfacing and electronic transfer of accounting, financial and operational data.

"For shipping Principals to deal with various shipping agents dotted around the globe, possibly with each one operating on different IT platforms, makes it difficult to speed up information flow and make crucial, time-sensitive decisions that can help reduce operating costs," he added.

Captain Imrecke stressed that Principals are increasingly asking for HUB agents to act as "ship owners".

"We have been told by a Principal that HUB agents still do not act like a ship owners and are too lenient towards their agency colleagues, especially own agents," he added.

"It is vital that HUB agents, with their agency partners, set and meet stringent criteria. In the case of GAC, these include working through a proprietary agency network where possible; using a strong network of high class sub-agents where the HUB agent is not represented; an open-minded Corporate culture; and a willingness to invest in qualified support staff and IT solutions," he said.

Principals' requirements involve huge financial investments for any shipping agency. Therefore the HUB agency market is occupied by only a handful of global players.

Despite some negative mindset among port agents that "one HUB agency equals many poor agents", Capt. Imrecke felt that this was not necessarily the case if local shipping agents shifted their thinking.

He went on to explain that HUB agencies produce revenue through "secured business for the contracted period" and equated it to "bread and butter income" for shipping agents.

"The revenue also comes from a higher volume of business as Principals operate fleets as opposed to one vessel; it generates extra business for the agent; and improves cash flow," he pointed out.

Agents also benefit from centralised reporting to the Principal by the HUB agent; a centralised Electronic Data Interchange (EDI) platform for faster two-way data transfer; interfacing projects only with the HUB agent; and the need for only single IT software instead of multiple platforms.

More importantly, agents could leverage on the HUB agency's global exposure for increased global visibility. Shipping agents can "piggy-back" on the HUB agency's international promotion and marketing activities.

Captain Imrecke concluded his presentation by outlining seven steps for a successful HUB agency:

- Move beyond traditional agency services to provide more value-added offerings

- Embrace a modern and forward-thinking management

- Accept and live up to changes in the shipping industry

- Invest in modern IT applications

- Comply with stringent codes of conduct and business ethics

The two-day forum organised by the International Transport Intermediaries Club (ITIC) included an in-depth look at the International Ship & Port Security (ISPS) code. The Forum on Ship Agency was chaired by Mr. Bjorn Engblom, Group Executive Chairman, GAC, & ITIC Director.

-Ends-

Editor's Notes
About the GAC Group
The GAC Group (GAC) is the world's largest independent shipping and transport services provider, with over 200 offices worldwide.

Established in 1956, GAC's core business covers three key areas - shipping, logistics and marine services. The GAC brand reflects value for money, quality, continuity, innovation and global reach.

GAC employs more than 5,000 people worldwide. The GAC Group corporate head office is in Dubai, in the United Arab Emirates. 

About GAC Shipping
GAC is a leading shipping organisation offering global port and hub agency services. In addition to ship's agency, GAC offers Bunker Supplies, Ship-to-Ship Transfers, Canal Transit and Ship Supply Services.

GAC also acts as correspondents for most of the International Group P&I Clubs.

© Press Release 2004