Wallenius Wilhelmsen navigates capacity shortages and service disruptions while delivering strong growth in 2022

Wallenius Wilhelmsen navigates capacity shortages and service disruptions while delivering strong growth in 2022

Wallenius Wilhelmsen — 2023-01-17

Members Corner

2022 has been a year of highs and lows for the breakbulk industry. While demand has been high, global disruptions and a misalignment between supply and demand have presented challenges for companies like Wallenius Wilhelmsen. The entire industry saw unfortunate capacity shortages and service disruptions affecting customers around the world. The disruptions began in Asia and spread to Europe and the US. On top of that, a peak in demand for high & heavy equipment added to the difficulties.

"We know that these disruptions have had an impact on our customers, and we are aware, and we truly recognize the impact the service quality has had on our customers," says Magnus Ödling, VP Global Industrial Account Development (GIAD). "We go to work every day to provide the best possible services in the breakbulk shipping industry, so this has been tough. We remain grateful for the continued support of our customers. On the other side, 2022 has been a record year for Wallenius Wilhelmsen in terms of breakbulk performance, which we should also be proud of. In brief, 2022 was a year of mixed feelings," says Ödling. "We have never seen the extent of misalignment between supply and demand across the sector before, it has hampered our ability to support our customers fully."

Disruptions caused 10% capacity reduction

The disruptions experienced in 2022 included labor shortages, geopolitical tensions, over saturation in ports and equipment shortages. In total, these key factors have directly impacted the availability of global vessel capacity. In fact, Wallenius Wilhelmsen alone estimates that more than 10% of its capacity has been unavailable compared to a normal year.

Prioritization hurts

To improve the situation, Wallenius Wilhelmsen was forced to make difficult decisions. This included a complete stop of acceptance of spot bookings in the fourth quarter and a reduction of Asia-North Europe exports during the same period. The company has also prioritized repositioning empty equipment over well-paying cargo to address the equipment shortage.

We have worked hard to mitigate the disruptions and continue to provide the best possible service to our customers. This has included prioritizations that has impacted both our customers as well as our own revenues ” Ödling fully understands that some of these decisions have not been easy for the customers, but stresses that it was necessary to support contract customers and recover the performance of the network.

Added expertise

Wallenius Wilhelmsen has a strengthened team of experts and looking forward to onboarding a few more talents during the first quarter. “We have the market’s best logistics experts, we just needed to scale to demand,” says Ödling who stresses that the Global Industrial Account Development team plays an instrumental role in designing and delivering robust shipping and logistics solutions that result in better experiences for breakbulk customers. The team has the right competence in terms of leading business development, delivering cargo operations in full compliance with safety procedures, and assisting customers with the help of all stakeholders at Wallenius Wilhelmsen.

Record cargo quality performance!

We are also pleased to report another year of positive development in cargo quality performance, with a damage ratio of just 0.02%.[OH1] This is an exceptional result! It is particularly impressive given the challenges faced in 2023,” says Ödling who wants to give credit to various teams across the organization as well as to our suppliers “We are proud of the focus on safety and quality that is at the heart of everything we do at Wallenius Wilhelmsen.”

Cautiously optimistic for 2023

Looking ahead to 2023, Ödling is cautiously optimistic. "We believe that many of the segments we service will remain relatively strong. The company will also strengthen its team with more experts in the first quarter of the year. Breakbulk remains a strategic priority for the company.”