In International Shipping News 26/05/2015
The impact of mega-vessels and mega-alliances remains a big worry for shippers and logistics service providers (LSPs). They are concerned about lengthening supply chains from production plant to port-of-departure to port-of-arrival to final destination.
At the TOC Europe Conference and Exhibition, which takes place in Rotterdam on 9-11 June 2015, leading supply chain specialists will discuss what they see as the major impacts of mega vessels and alliances on supply chain management.
Transit times
“The consequences of ultra-large vessels on supply chain performance are longer transit times to unload, longer transit times to reach the hinterland, fewer (direct) port calls and more transhipment,” says Phil de Groote, Transportation Director EMEA, Stanley Black & Decker.
Mr. de Groote will take in a debate on Day 1 of this year’s TOC Europe Container Supply Conference entitled Has the Shipper Really Been Forgotten?
“We need to improve drastically door-to-door transit times. At the moment, we are losing too much time at origin between booking/hand over of empty equipment and vessel departure. It is the same at destination, there is too much time between vessel arriving and final delivery,” Mr de Groote adds.
Participating in the same debate is Mark Holloway, VP Supply Chain EMEA, Goodyear Dunlop. “Longer lead times, less reliable delivery times, more constraints on routes, carriers pocketing the bulk of the benefits, with little going to customers or consumers,” is how he views the new container shipping landscape.
A similar view is held by a leading LSP executive, Helge Neumann-Lezius, Trade Manager Intra-Europe, Kuehne + Nagel (AG & Co.) KG. “The backlog of cargo these giant vessels are creating at terminals will increase cost and cargo lead time,” he says. “It further impacts negative storage at port, hinterland logistics and terminal utilization.”
Mr. Neumann-Lezius will expand on these implications for hinterland logistics in a debate – European Container Logistics: Improving First and Last Mile Performance for Deep Sea & Regional Trade Flows – on Day 2 of TOC Europe CSC.
Customer focus
A suspicion is that in deploying these ultra-large shipping assets, container lines are too focused on their own cost management at the expense of their customers.
A client needs more than a product comprising ‘a ship and a box’ comments Mr. Neumann-Lezius. “Today container shipping is becoming even more of a commodity and that means the requirement for LSPs to customize supply chains is constantly increasing.”
“Carriers need to focus on the people paying for their services and deliver to their expectations, rather than focusing pretty much single-mindedly on their profits,” adds Goodyear Dunlop’s Mr. Holloway.
Collaboration, visibility
However, reconciling these competing objectives will need far higher levels of collaboration and supply chain visibility. Mr. de Groote points out that shippers benefit greatly from having stable partners over longer periods. Consistent container volumes and logistics strategies will help to stabilize the container shipping business. At the same time shippers who respect their part of the contract will also see long term benefits from the relationship.
“We need to create stability and visibility in the supply chain by looking into total costs and transit times through partnership between shipper and carriers,” he says. Maybe there is a need for an independent platform to create this visibility, he adds.
And ports and terminals, too, are critical components in this wider supply chain collaboration.
There is definitely a need for more detailed and shared information across all parties of the supply chain and terminals have an increasing important role to play in this, comments Mr. Neumann-Lezius.
“End-to-end collaboration between carriers, 3PLs and ports to minimize lead times, increase reliability and delivery to customer,” are the key points Mr. Holloway wants to impart at TOC Europe. “Everyone needs to start thinking of containers and carriers as part of the end-to-end supply chain solution, not just a stand-alone link,” he concludes.
