Model Based benchmarking Consortium for Ocean Freight - An Introduction

1. Empowering Fact-Based Decisions Across Your Supply Chain
Ocean Container Transportation
Rate Benchmarking 2009
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2. Who is Chainalytics?
Empowering Fact-Based Decisions Across Your Supply Chain
• Chainalytics formed in 2001
– Headquartered in Atlanta, GA, with a second office in Bangalore, India
– More than 50 FTEs in US and India
• Two Practice Areas:
– Supply Chain Strategy
– Transportation Planning
• Recent Accolades
– “Great Supply Chain Partner” Global Logistics and Supply Chain Strategies
– Named for five consecutive years: 2004-2008
– “10 Coolest Supply Chain Boutiques” ARC Advisory Group in July, 2007
– “Top 100 Innovations, 2006” Supply and Demand Chain Executive
– Award for Model-Based Benchmarking
– “Pros to Know” Supply and Demand Chain Executive
– Tim Brown (2009), Gary Girotti (2007), Jeff Metersky (2006), Michael Kilgore (2005)
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3. Model-Based Benchmarking
Empowering Fact-Based Decisions Across Your Supply Chain
• Measure yourself against the market
• Ensure your are keeping pace with the competition
• Chainalytics Created Model-Based Benchmarking Consortium (MBBC)
– A collaborative membership based organization for confidentially sharing
transportation rate information to benchmark against market costs
– There are separate consortiums for Truckload and Ocean freight
• MBBC Goals
– Build a representative model of the market
– Understand carrier cost drivers
– Quantify impact of freight characteristics
– Provide a bellwether to validate procurement performance
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4. Consortium Membership
Empowering Fact-Based Decisions Across Your Supply Chain
• Truckload Model Start in 2003
– 65 model participants varying in TL spend from $12M to $500M+
– Over $11 billion in transportation spend with over 11.5 million loads
– Covers USA, Canada, and Mexico
– Equivalent to ~ 4% of the total North for-hire truckload market
Primary Business Sector Membership by Freight Spend
(percent of membership)
4 2
Over $500M
Foods Consumer 8 10
19% Products $250M-$500M
14%
Durable $100M-$250M
Goods
Beverages 14% 8 $50M-$100M
16%
Other
13 $25M-50M
6%
Industrial Whlsl/ Retail
$10M-$25M
11% Distrib 12% 17 Under $10M
8%
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5. MBBC Overview
Empowering Fact-Based Decisions Across Your Supply Chain
• New Ocean Freight Model
– Modeling Subsets for Import 20’, Import 40’, Import 45’, and Export
– Carrier type: Common carrier vs. NVOCC
– Container characteristics: Dry, GOH, Reefer, Frozen
– Shipper Characteristics
• Number of containers shipped
• Value of product shipped
– BAF, CAF and other surcharges included in the rate
– Route Characteristics
• Direction: Imports vs. Exports
• Terms of service: port to port, port to point, etc.
• Surface distances traveled
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6. 2009 MBBC: Currently
Empowering Fact-Based Decisions Across Your Supply Chain
• 15 model participants with FCL spend from $5M to $70M+
• Over $400M in total transportation spend
• More than 122,000 Container Loads
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7. Ocean Benchmark Report
Empowering Fact-Based Decisions Across Your Supply Chain
Lane by Lane Analysis – Company Detail
Origin Dest Dest
Origin Port Port Destination Dest Postal Movement Equipment Equipment Container
Port Country Dest Port Country City Country Code Type Type Size Cube
Bangkok TH Long Beach US US IM D 20 N
Bangkok TH Long Beach US US IM D 40 N
Bangkok TH Long Beach US US IM D 20 N
Bangkok TH Long Beach US US IM D 40 N
Bangkok TH Los Angeles US US IM D 20 N
Distance Bangkok TH Estimated US
Los Angeles Difference
US IM D 40 H
Surface Total Ship TH
Bangkok Cost per Angeles
Los Cost per US Estimated Cost Per
US Difference IM D 40 N
Dest Cost
Bangkok TH Los Container US Ship Cost Container
container Angeles Total US Percent Status
IM D 45 H
1,489 $ 3,161 TH 3,161 Angeles
Bangkok $ Los $ 2,628 US $ 2,628 $ US533 16.9% ABOVE
IM D 45 H
1,489 $ 5,039 TH 5,039 Angeles
Bangkok $ Los $ 3,151 US $ 3,151 $ US 1,888 37.5% ABOVE
IM D 20 N
57 $ 3,642 TH 1,821 Angeles
Bangkok $ Los $ 1,850 US $ 3,700 $ US (29) -1.6% IMAT D 40 N
57 $ 2,411 TH 2,411 Angeles
Bangkok $ Los $ 2,136 US $ 2,136 $ US275 11.4% ABOVE
IM D 40 H
2,256 $ 2,802 TH 2,802 Angeles
Bangkok $ Los $ 2,811 US $ 2,811 $ US (9) -0.3% IMAT D 40 N
2,256 $ 7,060 TH 3,530 Angeles
Bangkok $ Los $ 3,917 US $ 7,834 $ US (387) -11.0% BELOW
IM D 45 H
2,256 $ 3,636 TH 3,636 Angeles
Bangkok $ Los $ 3,616 US $ 3,616 $ US 20 0.5% IMAT D 20 N
2,256 $ 8,430 TH 4,215 Angeles
Bangkok $ Los $ 4,348 US $ 8,696 $ US (133) -3.2% IMAT D 40 N
1,489 $ 8,420 TH 4,210 $York
Bangkok $ New 3,765 US $ 7,529 $ US445 10.6% ABOVE
IM D 40 H
2,083 $ 6,219 $ 3,110 $ 2,726 $ 5,453 $ 383 12.3% ABOVE
2,083 $ 3,962 $ 3,962 $ 3,494 $ 3,494 $ 468 11.8% ABOVE
50 $ 3,280 $ 1,640 $ 2,353 $ 4,706 $ (713) -43.5% BELOW
50 $ 1,540 $ 1,540 $ 2,052 $ 2,052 $ (512) -33.3% BELOW
50 $ 1,950 $ 1,950 $ 2,228 $ 2,228 $ (278) -14.2% BELOW
2,669 $ 3,067 $ 3,067 $ 3,012 $ 3,012 $ 55 1.8% AT
2,669 $ 7,724 $ 3,862 $ 3,909 $ 7,818 $ (47) -1.2% AT
167 $ 3,224 $ 3,224 $ 3,697 $ 3,697 $ (473) -14.7% BELOW
7 © Copyright 2009 Chainalytics, LLC.
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