Global Supply Chain Insights

Ocean Carriers

• 2016 was a transformative year for ocean carriers with bankruptcy, mergers, acquisitions and alliances.
• Maersk is exploring the possibility of building “an end-to-end global trade network”, in which all the up to 200 possible transactions in a cargo shipment are digitized with the help from blockchain technology that uses a shared, decentralized database. (Vincent Clerc, Chief Commercial Officer, Maersk Line)
• Shippers concern over the safety of their supply chains in a post-Hanjin Shipping world is influencing annual trans-pacific contract talks, with rate levels being negotiated well above those of 2016. (Nicolas Sartini, CEO, APL)
• Overcapacity will exert significant pricing pressure on the container shipping industry over the next two years, but 2019 could be the year the industry meaningfully turns things around. (Hua Joo Tan, Executive Consultant, Alphaliner)
• Top 7 ocean carriers will control 70% of global fleet. (Hua Joo Tan, Executive Consultant, Alphaliner)

Ports

• Marine container terminals are facing serious operational challenges in handling mega-vessel volumes and ocean carrier alliance complexities.
• Port of New York/New Jersey – Landside Operations improvement initiatives:
  • Increase on-dock & near-dock rail capacity
  • Implement truck turn time appointment system
  • Implement inland depot
  • Construct cross-harbor highway
  • Implement night gates
• A high percentage of marine terminal’s footprints are too small to efficiently operate with mega-vessels and carrier alliances.
• Connectivity beyond the ports is critical in the Port of Long Beach’s Planning. (Dr. Noel Hacegaba, Chief Commercial Officer, Port of Long Beach)

3PLs

• 3PLs will fight commoditization with innovations on their value propositions.
• UPS will update this month its ocean container-tracking technology to provide origin, destination and travel details via online dashboard for freight forwarding customers moving goods into and out of the United States and Canada. E-Commerce has heightened the sense of urgency regarding visibility and changed the game.
• Mergers & acquisitions are extremely challenging. The three most critical factors are: 1.) Cultures need to blend, 2.) Technology platforms need to be integrated and 3.) Integrate back office functions. (Bradley Jacobs, President, XPO Logistics)
• Major focus at XPO Logistics is to deliver seamless solution, giving shippers visibility from origin to destination. (Bradley Jacobs, President, XPO Logistics)
• Freight forwarders will continue to grow volumes as ocean carriers’ customer service falls short of shippers needs.

Importers

• Will continue to have market pressures for their supply chains to be flexible and agile.
• Increasing demand for supply chain visibility which is essential in managing through disruptions and delays.
• Shippers’ Complaints about Ocean Carriers:
  • Invoice Accuracy
  • Sustainable Eastbound Rate Levels
  • Customer Service Response Times

(Rodolphe Saade, CEO, CMA CGM, World’s 3^rd largest container line)

• BCOs are looking for end-to-end solutions.