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Also,
we need to know if a vessel is on schedule,
if a feeder service meets the mother ship
according to plan, if there are any incidents
along the way."
In
a bid to effect this greater transparency,
this shipper is starting to build service
agreements with the carriers it uses, clarifying
what is expected of them and when. The company
also operates with a few shipping lines–
at the moment four carriers are responsible
for transporting a significant portion of
its volumes. The company also ties the carriers
into a three year relationship with annual
rate reviews and certain guarantees over
volumes.
This
creates a mini-market effect which is a
win-win situation for both carriers and
the company. For the customer it means they
get the service levels they require to get
boxes delivered where and when they want.
It affords them greater transparency in
planning and prevents the waste of time,
money and disruption to service spent in
constantly chasing the cheapest rates.
For
the carrier it allows them the luxury of
being able to develop their services, guarantees
volume and perhaps most importantly removes
the constant threat of their service being
pulled in favour of a cheaper but inferior
alternative.."
The
result of all this, after the initial shock
of the carrier turning down the business,
was appreciation of the honesty of that
carrier company which gave our source's
company more confidence in their ability
to provide the level of service they were
offering. The global manager said "today
we treat this company as our premium carrier."
A
key area in which carriers can provide the
kind of service that shippers are looking
for, he explained, was in the area of connectivity.
As
part of the service package carriers provide
to major customers, this element cannot
be under-estimated; as the customer's primary
concern is getting its boxes to the required
destination on schedule.
So
for example, if a carrier has a good relationship
with the US rail authorities, or trucking
companies in Europe, if it can get its boxes
unloaded efficiently or if it has berthing
priorities these factors will make it more
attractive - and for this higher level of
service many global brand name companies
are willing to pay more.
In
addition to connectivity, another area in
which carriers can attract major clients
and premium rates is through greater transparency.
As
all businesses try to increase their supply
chain efficiency, the importance of transparency
between different partners has increased.
Our
source said, "From a planning perspective
we need a lot more transparency on the carriers'
execution of their service. This means we
need our IT systems to recognise where a
product is and how much of it is where.
Also,
we need to know if a vessel is on schedule,
if a feeder service meets the mother ship
according to plan, if there are any incidents
along the way."
In
a bid to effect this greater transparency,
this shipper is starting to build service
agreements with the carriers it uses, clarifying
what is expected of them and when. The company
also operates with a few shipping lines–
at the moment four carriers are responsible
for transporting a significant portion of
its volumes. The company also ties the carriers
into a three year relationship with annual
rate reviews and certain guarantees over
volumes.
This
creates a mini-market effect which is a
win-win situation for both carriers and
the company. For the customer it means they
get the service levels they require to get
boxes delivered where and when they want.
It affords them greater transparency in
planning and prevents the waste of time,
money and disruption to service spent in
constantly chasing the cheapest rates.
For
the carrier it allows them the luxury of
being able to develop their services, guarantees
volume and perhaps most importantly removes
the constant threat of their service being
pulled in favour of a cheaper but inferior
alternative.
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