3. 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 carrier
delivers 60% on time
High prices
1. Low prices
2. On-time delivery
4. Today’s liner networks are
no longer adequate
Direct string
This network design was invented TO:
•leverage large vessels to reduce unit cost
•maximize coverage with few vessels
Hub & Spoke
This 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
5. Today’s liner network: Direct String
The complexity leads to lower
performance on the most important criteria
6. The complexity leads to lower
performance on the most important criteria
Today’s liner network: Hub&Spoke
