Category Archives: Strategy

2M restores transpacific capacity, pleads for return of empty containers

Posted on September 21, 2020 by | 1 comment

Ocean carriers are suddenly waking up to the fact that supply chain disruptions for their customers are bad for relations. Now they’ve decided that they blanked too many voyages. And thehoarding of containers by customers who usethem to store goods they’ve already taken possession of has disrupted things further. There just aren’t enough containers and chassis to get cargo from China and to move it about.

They should have thought about the repercussions in the supply chains when they started out reducing service.

The main advantage of ocean shipping is the cost and large quantity; if the service becomes marginally reliable in terms of time of delivery, naturally people are going to look for alternatives like buying larger quantities, beyond storage space, and using the containers to help out.

Supply chain performance is about matching supply to demand, and ocean carriers should continue to remember that it’s not about them, but about their customers’ needs.

By Gavin van Marle 21/09/2020

Link: https://theloadstar.com/2m-restores-transpacific-capacity-and-pleads-for-return-of-empty-containers/

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Posted in Logistics, Shipping, Strategy, Supply Chains

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Maersk joins CP Rail inland with new transload facility

Posted on September 20, 2020 by | Leave a comment

Maersk is in the forefront of expanding their supply chain control into the hinterland. The Port of Vancouver is in a very closed in space, a bit like San Francisco, with little room to expand facilities. Maersk has finally grasped the idea that they should cooperate with supply chain members rather than simply do business deals.

Maersk is now finally positioning itself as a full service logistics provider instead of simply an ocean carrier. It’s taken many years, as ling as I’ve been working in it, for maritime companies to see this, and Maersk is way out in front of their rivals.

It will be useful for Maersk to transload containers inland, where there is much less congestion and where a special purpose facility can be built, and where there’s a direct link to a large rail network through Western Canada down into the Midwest. I think there is even a CP terminal in the Chicago area.

By Ian Putzger in Toronto 18/09/2020

Maersk gets on board with CP Rail to move inland with new transload facility – The Loadstar

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Posted in Logistics, Ports, Strategy, Supply Chains

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Walmart tightens on-time, in-full requirements

Posted on September 14, 2020 by | 1 comment

A large shipping firm has grabbed a problem by the throat.

Wal-Mart has raised its on-time in-full (OTIF) shipment requirements for all suppliers to 98%. It’s in response to a significant drop-off of on-time deliveries and short shipments, possibly due to COVID-19, but also connected with general carrier and business distress. By punishing suppliers, Wal-Mart sets a standard that others will want to match.

Failure of on-time and in-full deliveries poses a severe problem for managing inventory and matching supply to demand. Carriers won’t be able to get away with it now, and suppliers won’t do as much short-shipping. The standard will ripple over first to other consumer-oriented firms, then to all sorts of firms.

Standards for delivery are a good thing if they become industry-wide. They change the stakes, and give the consumer a clear idea of what to expect for a shipment. They set a basis for deciding what a reasonable charge is. If you can cheat on the delivery date or amount and get away with it, you are likely to when you think it’s to your advantage. And that violates customer trust.

A good example is Amazon’s pioneering of two-day shipping via Amazon Prime. It created a standard for the e-Commerce practice that firms in that market have to be clear about when they set the price for their full offer (including shipment terms)– are they following it or not?

Improving customer trust is a good thing, and sets up sound guidelines for customers to evaluate the value of an offering.

Mark Solomon Friday, September 11, 2020

Link: https://freightwaves.com/news/walmart-tightens-on-time-in-full-requirements

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Posted in Logistics, Production Operations, Strategy, Supply Chains

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