Throughout 2014, terminal and ocean carrier leaders spoke at industry conferences about working together to combat poor productivity. Yet when it has come to collaborating to improve productivity, eliminate waste or run sustainable operations, has the industry truly improved? High-level presentations are one thing. But when working at the operational frontline, it’s not so easy.
For example, terminal and container shipping line interests and KPIs often get in the way of improvements. Consider the opportunity to turn around a vessel six hours early. Berth planners can typically choose where they can add a gang and crane for faster vessel turn-around, but that adds cost and defeats their internal KPIs and incentives. As such, they won’t offer this option to the carrier who may, in fact, save significant fuel costs if they pay slightly more to gain the six hours. The discussion never takes place, and the benefits are lost.
Delivery of more mega-vessel capacity and new carrier alliances won’t respect the continuation of this status quo. In 2015, these forces will grow stronger and the industry will need to put aside a “doing it my way” mindset and instead drive shipping partners to look beyond their immediate internal interests and find additional productivity through collaborative business processes. The forces of commoditization and continued cost pressure will work together to reshape the old carrier networks and put pressure on the industry to be more efficient, improve vessel turn-time and throughput through the terminal to waiting trucks and rail.
These challenges have already inspired investment in optimization of assets, the current and next wave of automated terminals. In 2015, we’ll see more focus on collaborative business processes with supply chain partners. The net return for carriers and terminals is a better, more efficient, lower cost and more reliable ocean supply chain.
Andy Barrons, Senior Vice President and Chief Marketing Officer, Navis