1. TPM 18th – Enforceable Commitments
Where the industry needs to go?
How we can jointly increase efficiency?
March, 2018
2. 2
Not delivering on commitments leads to inefficiencies in the supply
chain
Provide sufficient equipment at requested location
as per contractual agreement
Provide agreed space on vessels and transport plan
High quality of shipping documents and invoices
Well trained Customer Service & Sales experts
Cargo owners provide the committed cargo
(as per contract)
Cargo owners keep booking discipline
Provide correct shipment data
Pay as per agreed credit terms
CARRIER COMMITMENTS SHIPPER COMMITMENTS
Do Carriers and Shippers always
stick to their COMMITMENTS?
3. 3
Carriers and shippers need to deliver on commitments to improve the
overall supply chain
$
Supply chain INEFFICIENCIES are creating unnecessary COSTS for
carriers and shippers
COSTS
The main focus in the industry should be on IMPROVING THE OVERALL SUPPLY CHAIN for all
relevant stakeholders
Carriers should be interested to learn from customers and find out WHAT THEY REALLY NEED
Customer Needs (Examples)
2 3 4
HL recently performed market research which confirmed classical customer requirements:
On time delivery1 Space availability
Accessible and knowledgeable
customer service staff
Timely and accurate
documentation
4. 4
What is the impact on Shippers and Carriers
if commitments are NOT fulfilled? (1/2)
SHIPPER Commitment CARRIER Impact
ON TIME DELIVERY
Place real booking
(no “dummy“ bookings)
Cargo is available at port
of loading before cut-off
Correct transmission of
cargo data
Low vessel utilization
Loss of revenue
Additional administrative
workload
Harm of reputation
Deliver contractual
volume as agreed
Deliver booking forecast
Low vessel utilization
Loss of revenue
Additional administrative
workload
Potential equipment
shortages
Harm of reputation
SPACE AVAILABILITY
CARRIER Commitment SHIPPER Impact
Provide equipment as
agreed
Space availability
Transit time as per schedule
=> be able to provide info
flow on measuring transit
times
Inland delivery as per
agreement
Need for warehouse
buffers
Costly last minute
contingency planning
Lost sales/loss of
revenue
Higher inventory costs
Reserve space for
volumes contractually
agreed
Reserve space as per
shippers forecast
Delayed cargo delivery
at destination
Possible production
interruptions
Harm of reputation
Lost sales/loss of
revenue
ON TIME DELIVERY
SPACE AVAILABILITY
VERSUS
1
2
5. 5
What is the impact on Shippers and Carriers
if commitments are NOT fulfilled? (2/2)
SHIPPER Commitment CARRIER Impact
TIMELY AND ACCURATE DOCUMENTATION
Provide correct
shipment data
Provide data on time
Use agreed channels
Additional administrative
workload
Increase of disputes
Inefficient Customer
Service & Sales teams
Use right channel of
communication
Slowdown of booking
process
Creates double work
within the organization
ACCESSIBLE AND KNOWLEDGEABLE CS STAFF
CARRIER Commitment SHIPPER Impact
Booking confirmation as per
agreed timeline
Issue correct shipping
documents
Issue correct invoices
Increased administrative
workload
Delayed cargo release
(B/L)
Increases claims and
disputes (invoices)
Unforeseeable extra
costs (storage etc.)
Professional points of
entry for customers
Reachability of shipping
experts
Problem-solving abilities
Loss of efficiency due
to long waiting times
Increased
administrative workload
Harm of reputation
Lack of satisfaction
TIMELY AND ACCURATE DOCUMENTATION
ACCESSIBLE AND KNOWLEDGEABLE CS STAFF
VERSUS
3
4
6. 6
How can we remove the inefficiencies in the supply chain together?
??
ON TIME DELIVERY SPACE AVAILABILITY
ACCESSIBLE AND
KNOWLEDGEABLE
CUSTOMER SERVICE STAFF
TIMELY AND ACCURATE
DOCUMENTATION
LESS INEFFICIENCIES
TO KNOW THE RIGHT SCREWS CAN LEAD TO
7. 7
Today’s contracts are fine, there is no need to change anything
NYSHEX developed a model which can be leveraged into existing contracts
I would be OK if my MQC gets reduced if I do not deliver what I promise over a 3-month period
As long as I receive my cargo at destination as per promised date, not minding the route
Changes to my booked vessel are not accepted unless I make them
We would like your FEEDBACK on following statements
9. 9
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