Container shipping has become a commodity, where customers require low prices and high on-time...
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Transcript of Container shipping has become a commodity, where customers require low prices and high on-time...
Container shipping has become a commodity,where customers require low prices and high on-time delivery, but are getting neither.
Customer requirements: What they get:
3. Short Transit times
4. Personal relationships
5. Easy documentation
6. Large port coverage
7. Credit
8. Accessible customer service
9. Electronic Data Interchage (EDI)
10. Tracking of containers
11. Adaptability to local conditions
Low utilization
High unit cost
The best carrierdelivers 60% on time
High prices
1. Low prices2. On-time delivery
Today’s liner networks are no longer adequate
Direct stringThis network design was invented TO:• leverage large vessels to reduce unit cost• maximize coverage with few vessels
Hub & SpokeThis network design was invented WHEN:• carriers had few strings• terminal capacity was abundant.
• Today’s carriers have many strings and therefore a very complex system.
• Port congestion only amplifies the problem
Today’s liner network: Direct String
The complexity leads to lower performance on the most important criteria
The complexity leads to lower performance on the most important criteria
Today’s liner network: Hub&Spoke
Point-to-point services have higher vesselcost… but the savedcost of complexity outweighs this disadvantage
The commercial standards drive the same problems as the network
Today’s commercial standards
The airline model turns the problems into significant benefits
Once the commercial benefits are added, the smaller vessels become very competitive
These principles favor the small forwarders
Thank you for your time