The most recent PwC 2018 survey of transportation and logistics CEOs revealed that 60 percent of executives had confidence that global economic growth would pick up over the next 12 months. This is a 28 percent increase in confidence over last year’s survey of this segment. This optimistic view is supported by the fact that digital transformation has taken hold. This is in line with what we are seeing from our members.
Technology solutions that address the industry’s current pain points are being adopted. Pricing volatility and the unenforceable nature of ocean contracts are significant pain points that negatively impact supply chain integrity and delivery to customers, resulting in added costs and the inability to effectively plan freight costs.
Enforceable contracts with guaranteed vessel space and equipment, and fixed pricing from NYSHEX, hold a great deal of promise for the container shipping industry as a whole. Enforceable means carriers and shippers must fulfill their contractual commitments or be penalized. This added certainty improves on-time delivery to customers and removes the inefficiencies from no-show bookings, container rollings, and blanked sailings.
New methods of pricing based on the time of contract and fixed, forward rates provide a more predictable and transparent cost structure for both carriers and shippers. This is critical for 2019 when pricing will be impacted by the International Maritime Organization low-sulfur mandate that goes into effect Jan. 1, 2020.
Furthermore, as a neutral third party comprised of shippers and carriers, NYSHEX has been able to facilitate collaboration sessions and workshops addressing key industry challenges. We are starting to see a behavior shift and commitment from all sides to make positive changes.
Technology that provides the greatest benefits today and moves the industry forward will be embraced. The excitement around the “solutions of the day” that are being hyped distract the industry from those innovations that are currently improving processes and delivering much needed reliability.