We continue to see a lot of blanked voyages. Demand must not be shaping up to be very good after all, and prices just won’t stay up. What else would you expect if you make your customers guess about the inventory they have to carry. Once they have bitten that bullet, it will be hard to get them back into a non-competitive shipping mood.
By Mike Wackett 03/06/2020
Alliances schedule 75 blankings for Q3, as hopes of peak season demand fade – The Loadstar
Posted in Logistics, Managerial Econ, Microeconomics, Shipping, Strategy, Supply Chains
Tagged blankings, containers, intermodal, service, transportation
This interview with Ryan Peterson, CEO of Flexport, is fascinating. It is well worth registering at the Loadstar in case you don’t already have access.
Ryan points out that only 75% of freight bookings are kept. This may be a correlative of on time percentage of about the same amount for ocean carriers; but it is more symptomatic of a situation in which the uncertainty breeds more uncertainty. It’s like new product introductions; no one knows if your new product (disk drive, for example, in the business I was in years ago) is going to sell; it has plenty of promise, but also lots of competition. As a result your distributors (NVOCCS and freight forwarders) over-order, trying to convince you they can peddle lots of them, for fear that they will be cut out of the allocation when you start to deliver but can’t give them their whole order. In a sense, for an ocean alliance every voyage is like a new product launch. People over-order, they plan, but can’t full ships, so they cancel (or reroute, changing schedule). It’s a no-win for everyone.
Ryan is right in my view; data and sharing it can help. The issue is whether companies can be talked into sharing data. That’s what his firm is partially about– facilitating the exchange (for a price of course!). And for many firms, shippers and carriers, it should be worth it; a trusted intermediate can greatly reduce transaction costs.
Listen up– you’ll learn a lot!
Source: PODCAST: Behind the Flexport phenomenon; Ryan Petersen interviewed – The Loadstar
Posted in Logistics, Ports, Service Management, Shipping, Strategy, Supply Chains, Trucking
Tagged alliances, analytics, big ships, container shipping, innovation, Logistics, maritime, ocean shipping, ports, service, Software, supply chains, technology
This McKinsey piece makes some of the best points I’ve heard about improving the customer experience. These thoughts resonate with me concerning the import-export logistics experience for customers.
Especially useful are:
The journey stinks though the legs perform well. Put in the context of ocean logistics, If the ocean carrying segment has only 70% reliability, it really doesn’t matter how reliable the other steps are; you’re limited to 70% satisfaction overall.
Some touchpoints have high importance but give low customer satisfaction.
Here’s the link to the article:
The benefits of improved customer experience can be fleeting unless changes to supporting back-end operations are made, as well.
Source: Putting customer experience at the heart of next-generation operating models | McKinsey & Company
Another article form the same source, cited above as reference 2:
New research reveals that focus, simplicity, “digital first,” and perceptions matter most.
Source: The four pillars of distinctive customer journeys | McKinsey & Company
Supply Chain Digest Port Technology International Marine Link
Supply Chain and Logistics 