JOC Articles

THE EVER-EVOLVING MAKEUP of the container shipping business is fascinating, if not amazing. About 60 years ago, a trucker from North Carolina put some trailers on the deck of a World War II-era vessel and began the evolution. Next came cellular ships, with containers of varying sizes, refrigerated, tanks, and flat racks. From modest 500-TEU ships to the newest 22,000-plus-TEU behemoths, the hardware has changed dramatically.

Likewise, shoreside cranes replaced onboard cranes of self-sustaining ships, and yard cranes replaced chassis on terminals. I could go on and on about the notable changes in the physical makeup of the industry.

Some reading this also will recognize the makeup of the key players then and now. Nine US-flag carriers in foreign commerce have been diminished to none (with due respect to Matson’s weekly Chinato-the-US West Coast service and 60 or so ships operated under the Maritime Security Program owned by “US citizens” who happen to be owned by foreign interests); six Japanese carriers are down to one, ONE (Ocean Network Express); six South American carriers are now owned by other interests; and 13 European-flag companies are essentially five.

To be sure, others have entered the scene, Mediterranean Shipping Co., CMA CGM, Cosco, Evergreen, Yang Ming, HMM, among those. But what used to be an industry of 15 to 20 major players in the world is now essentially the top five, which control 65 percent of global capacity and lift. Services provided by the world’s carriers also changed. From port to port, it emerged into intermodalism, offering rail ramp, truck ramp, and door moves initially in North America and now spread across the world.

The common thread is that one entity started something, to be followed by others in terms of equipment and services provided. Others quickly adopted innovation because of the competitive nature of the business. Absent the first few years of Sea-Land’s emergence into container ships, its own terminals, and wheels under every box, there were few changes that were differentiators for long.

We’re now watching the next phase of the evolution, and, at least temporarily, the common thread to follow the lead is breaking. Three distinguishable models are being developed. Two carriers have decided the status quo isn’t a practical business model — you really can’t make enough money to justify what you’re doing. Maersk and CMA CGM are embarking on a path to become fully integrated logistics and/or supply chain service providers. They’ve seen the ongoing rise of similar entities, with little capital required and an apparent ability to make money in almost any market, something they haven’t been able to do consistently in shipping.

The asset-light companies have done what the shipping lines try to do with little success: increase market share and make more money while doing it. Shipping lines manage to capture higher market shares among themselves, but at a steep price, all while losing share to the asset-light companies. Business schools around the world could spend years studying the root causes and defining the what-not-to-do models they could come up with easily. So, two carriers have decided to pursue a new business model.

The second model has been around since the early days of containerization, but the cast of characters has changed. Going back to my recitation of who made up the industry a few decades ago, many of those were state-owned or financially supported, primarily to protect their local markets and gain access to viable foreign currencies. We see the same model today: state-owned or financially supported companies, with a big push for support from manufacturers and agriculture under the flag of nationalism.

These entities may or may not be profit-driven. When nations decided to stop the cash infusions, most of their subsidized carriers went out of business or were sold. But several Asian nations are more than willing to continue the model, with varying degrees of support, but still pouring large sums of money into entities that have a purpose other than making money.

Then there is a third model, with MSC, the world’s second-largest container carrier, pouring billions of dollars into the cruise industry. If you think $175 million is a lot to spend on a 20,000-TEU container ship, try building state-of-the-art floating cities for 5,000 passengers at $700 million each — and not one or two, but 10 or more.

A couple of carriers have decided to just leave well enough alone. One is partially supported by a city government as opposed to a country, with a major shareholder who happens to own a large potion of an asset-light company that has grown and prospered.

So, what’s the takeaway? It depends on who you are and what your interests are. Just know that today’s seascape is very different than it was two decades ago. The emerging model will present different opportunities and challenges. Some might want to start thinking now about how to deal with it. JOC

Image Source: Money Magazine

THE START OF 2019 is sending signals that we may have slower trade growth than anticipated, present-
ing challenges to all. The National Retail Federation says it expects a decline in year-over-year growth, the
World Bank is sending signals that the global economy is slowing, with China leading the way. This isn’t great news for any sector of global trade. Carriers are already smarting from a less-than-spectacular 2018 and face increased capacity being delivered in 2019. Shippers, some of whom felt the sting of unusually high spot market rates during the last couple of months of 2018, face what could be increased tariffs after March 1 when the US and China end their trade talks. Carriers also are seeking increased rates and anticipate a jump in fuel costs related to the International Maritime Organization’s low-sulfur fuel mandate that takes effect Jan. 1, 2020.  Balancing these conditions will be a challenge to all involved in ocean shipping, with shippers and carriers working on plans to keep their economic equilibrium, trying
to meet budgets most set months ago before the unfavorable news of recent events.

Some of the drama started playing out in December as carriers met with larger shippers to begin the 2019-2020 contract negotiations. Carriers must get back on track to make money as they did in 2017 after six years of losses, having failed to do so in 2018 because of decisions made early in the year, decisions that will impact them through April. Managing capacity, they were able to recover a bit in the spot market late in 2018. Carriers also caught a break with oil prices declining in late 2018. But the larger shippers have a deal in hand lasting almost four more months, and while they recognize conditions better than most, they aren’t in a mood to just accept increases because carriers aren’t making money.

So negotiations for the 2019-2020 contracts will be difficult. Carriers were able to get spot rates up by more than double some of the service contract levels. But facing the large service contract shippers who have low rates and asking for in- creases has never been an easy task for carriers; volumes available seem
to bring out a gift-giving reaction.  With the low-sulfur mandate beginning in January 2020, the new contracts will run four months through April 2020, so whatever is agreed to this year will haunt carriers if they fail to act in the next round of contract talks.

Early indications are there may be increases of a relatively modest level but a fuel surcharge question remains. The thinking is there will be a prolonged negotiating period — nothing new — but with far more volume involved, one strategy may be, “let them see that the ships won’t be full, they’ll be more reasonable.” None of this is new; conditions of the day regularly alter the issues and outcomes. The basic challenges rarely change. Supply and demand ratios play the largest role in rate levels.

Last year, this had a big impact on the spot market, causing wide variances in what shippers paid to move their cargoes. We have 11 months to watch this play out for 2019. The continuing decline in reliability has both shippers and carriers pursuing improved services. Both sides continue to talk about it but do little to correct it. Carriers refuse to increase vessel speeds when well behind in their schedules, and some have pulled sailings with little or no advance notice. Shippers continue to have high levels of no-shows on bookings, with few providing accurate forecasts to carriers on a consistent and timely basis.

There are those who genuinely care about and work toward improving their side of the equation, recognizing that they help themselves by being cooperative. Unfortunately, they are in the minority, a great deal of that relating to who is booking the cargo — the cargo interests or third parties.  Many third parties are vigilant and cooperative, but there are hundreds of these entities who attract cargo one way — price. To them, service levels are of little consequence.

Issues such as properly declaring what’s in a container to ensure safe stowage to avoid damaging results also isn’t high on their priority list.  Look closely at the number of incidents of fires onboard vessels and the real causes.

Only time will tell the outcome of the many challenges the industry faces again this year.

The European Shippers’ Council, supported by well-known consultants, is asking for transparent

and accurate fuel surcharges, and no “one size fits all” solutions. There is a logical argument to
be made for that approach — there isn’t one global cost for fuel by sailing; it is a function of
prices of fuel in a lane, schedule distance, steaming speed, and consumption by vessel. It’s also
affected by utilization if you establish a per-TEU or FEU charge.
What is being suggested is cost-based pricing, actually not a recent request of shippers. It is
why surcharges exist. When prices rise, they insist on knowing why. When told it is a function of
costs rising, be it fuel or a new labor contract, they say they want more transparency. They
want justification of higher prices, in detail.
A group of conference carrier senior pricing people got together in the late 1970s and over time
created a basic formula for cargo rates and surcharges. The essence was:

• A base ocean rate generally reflecting vessel and associated costs, all administrative
  costs, the cost of capital, taxes, rolling stock (containers and chassis including
  maintenance), systems, communications, overhead, and something for profit
• Terminal charges at origin and destination to reflect costs associated with local
  ports and terminals, including labor
• Surcharges on cost factors that were subject to considerable fluctuation, that were
  easily visible to the public, such as a currency adjustment and fuel

Looking at a container operation port to port, these are essentially the costs associated with
that service. Once you get into through intermodal services, you have to include:

• Inland transport costs to/from the origin or destination and returned to the
  inland terminal or port
• Inland terminal costs
• Repositioning costs for empties due to imbalanced trade lanes

Every carriers’ costs differ, and the variability is far greater than most might think. Just examine
the audited financial reports from carriers who make them public. When you calculate the
average revenue per container and the average cost per container, the combination provides
the margin per container, and those do vary greatly. What you generally see is an “operating
income” number — calculations that don’t include taxes, cost of capital, and depreciation,
which also vary by carrier.

In recent years, we’ve seen a lot of articles and heard discussion on the cost savings by larger
vessels vs. their smaller counterparts. Those numbers are real and significant. The carriers with
a significant portion of their fleet with vessels that are above 16,000 TEU have a significantly
lower vessel cost base than carriers who have few, if any, of those assets in operation.
That gets us to a dose of reality, that being that prices and surcharges are not cost-based; in a
market environment, they can’t be because the issue of competitiveness has to be considered.
The fact is that the market sets the rates, with all factors, including supply and demand, coming
into play.
My point is that the call by shippers to cost base the fuel surcharge isn’t what they really want
at all. If carriers followed their lead and did it, there would be hundreds of surcharge levels —
by carrier, by lane, and, possibly, by sailing. How would that fit into their budgeting and
forecasting? On the carriers’ side, they’d need a small army of people with a broad-reaching
process and considerable supporting systems to do the calculations daily, and then to send the
results out to the customer base. And by the way, rates and charges would go up considerably.
One other element that shippers say they want is “stability,” a known rate for a lengthy period,
likely to correspond to their budgeting cycle. But at the same time, they’ll reserve a good
percentage of their annual volume to play the spot market.
In my view, the shippers want an all-in price that is low and continues to go lower, forever. No
surcharges, no rate increases.
Guess what? A recent widely read report from Alphaliner, a large analytical and consulting firm,
says, “Inflation-adjusted freight index fell over 50 percent in last 20 years.” They’ve gotten what
they wanted from carriers.
So, what’s the problem? Why the outcry for a cost-based fuel adjustment charge? The market-
based pricing has given shippers a significant decrease in their ocean transport-related costs
over an extended period of time. Is there a thought that cost-based pricing will reduce that
further? The last seven years of financial results from the container carrier industry suggest not.
My perspective could be very wrong; the European Shippers’ Council and the large consulting
firm could be right. Let’s try cost-based pricing for a while. It may be a little messy with so many
variations, but all the new technology being developed will keep track of it all. I’m thinking that
the carriers should want to try it, they are likely to make money that way.

(I was featured on Lloyd’s Loading List.  The article below was written by Will Waters.
Monday, 09 July 2018)

Poor ocean freight reliability is the inevitable result of low rates, observes one senior consultant that has worked with numerous lines and BCOs

Poor container shipping reliability is the inevitable result of low ocean freight rates, and so shippers should not be surprised that service levels have continued to fall, according to one senior consultant that has worked with numerous lines and beneficial cargo owners (BCOs).

Gary Ferrulli, a former senior liner executive and now CEO of Global Logistics & Transport Consulting, writes in an article today in Lloyd’s Loading List  that a report in June by Drewry,commissioned by the European Shippers’ Council (ESC), concerning the declining level of customer service by ocean carriers €œcan’€™t be a surprise to anyone, looking at the financial results of the industry in the last seven and a half years and knowing that rates have fallen 50% in the last 20 years, in real terms.

He notes: Under those conditions, something has to give, and it is service levels of all types. For those who don’t understand that, the saying is: you get what you pay for™.€

In regular meetings with BCOs, he observes that the majority say they would pay more for a better service €“ and when presented with the real option, don’t use it for much cargo€. He cited the example of Matson, the line with the best performance record in the industry, which charges $150-$250 more than tier-one carriers, but which has been unable to successfully expand beyond one string that lifts an average of 1,000 loads a week.

But he says the failure to improve standards is also €œthe ocean carriers’ fault. As with the fuel surcharge, they focus on volume and market share and not profitability.

Although, in theory, shippers could persuade carriers to improve service at higher rate levels, you can’€™t start a €˜fast and reliable€™ service with a handful of customers€, too few supply chain or logistics executives are incentivised to prioritise quality over price.

How many have incentives in their compensation with a €˜cost containment€™ KPI? Ferrulli asks. They all do  it comes from the top. And that’s the big guys; think of the traders, wholesalers, etc. ˆ’ they have to have the lowest rates to get any margin for their profitability.

It is, therefore, up to the carriers to control their destiny€, he argues, adding: They can manage capacity if they want to. They did it in late 2009 through 2010 and had a $30 billion turnaround from losing $22 billion to making $8 billion, in one year.

They anchored over 600 vessels. They created the model and it worked. They made money. And have never done anything remotely like it again.

But after one decent year, lines €œreverted to form, chasing volume, filling ships and market share”, Ferrulli said.  They had a great opportunity (again) in August 2016 when Hanjin pulled the plug.

They each got a portion of the significant volume available that Hanjin couldn’t carry and they were rid of one of the price-focused carriers. For four months they kept rates up and, like in 2011, in 2017 they reverted to form: chase volume, fill ships, and gain market share with price as their catalyst.

He said the recent report by Alphaliner of how, adjusted for inflation, rates are 50% lower than 20 years ago,  illustrates that “this is an industry occupied by entities that, for whatever reasons, are not profit driven as are other businesses”.

That is easy to explain in the case of  state-supported carriers in China, Korea and Taiwan, but doesn’t explain the behaviour of the European lines “who dominate the industry, absent Cosco€.

Ferrulli concedes that €œit is not an easy, single-issue matter€, noting: There are complex circumstances. But the reality is in those words: you get what you pay for€™, and not many are truly willing to pay any more.

He continues: If shippers complain about a fuel surcharge at $50-65 when they know full well that fuel has risen 70% in the last 19 months, what real opportunity is there for a reasonable conversation about price and service being connected?€

He concludes: On the flip side, carriers have to force the issue  as they did eight years ago. And they won’€™t, for whatever reason they conjure up.

Lloyd’s Loading List is part of the Business Intelligence Division of Informa PLC
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THERE HAVE BEEN stark contrasts this

year in actions taken by transpor-
tation providers and the impacts

on ocean carriers, truckers, and
shippers.
Ocean carriers either totally
misjudged the impact of rising fuel
costs, or chose to ignore it, plowing
ahead with their strategy of filling

ships and chasing market share. Al-
though not all carriers have reported

their first-quarter results, those that
have provide a view of the full year
ahead: It’s not going to be a banner
financial year for them. They’ve
signed long-term contracts with
little opportunity to recover fuel
costs that have soared 30 percent
this year and 70 percent over the
past 16 months.
Contrast that with the US
trucking industry. When fuel prices

spiked, motor carriers almost imme-
diately raised their fuel surcharges.

The supply-demand issue is one ele-
ment, because finding enough truck

capacity is a real struggle, giving
cargo interests virtually no leverage

to mitigate a rising surcharge. Evi-
dence suggests, however, that cargo

interests are accepting the situation.
As for shippers, it’s a mixed bag.
They are paying considerably higher
costs for trucking services, while
essentially paying what they have

been for their international contain-
erized ocean transport. As trucking

volumes far exceed the international
containerized moves, shippers will
pay more to move their total freight
in 2018.

The ocean carriers again are
absorbing what should be a shipper’s

cost. They have done this with sev-
eral cost factors, including terminal

charges and equipment reposition-
ing in the US. A recent report from

shipping analyst Alphaliner notes
the ocean carriers continue to chase
market share at the expense of their

bottom line, by not managing ca-
pacity. So, they find ways to impact

themselves negatively.
I’ve discussed this situation with

clients, service providers, and indus-
try colleagues, and there are some

interesting scenarios that could
occur with varying implications for
shippers and ocean carriers. I’ll only
discuss the most likely here because
of space constraints.
The likely scenario is that ocean
carriers will continue their largesse
and absorb a vast majority of the fuel
cost increases, until it reaches such a
pain point that they’re forced to act.
I’m thinking it could take several
months, and then the actions will
vary, but ocean carriers likely will

ask shippers for a surcharge, regard-
less of contracts.

If shippers agree to pay, they
move on. If they don’t, watch for a

strict interpretation of the con-
tracts, especially on capacity and

volume commitments. For a shipper
who has signed up for 5,000 TEU
— roughly 100 TEU a week — don’t
expect to be able to book beyond
that number during the summer-fall
peak season. And when space gets

tight, shippers will see their ship-
ments increasingly rolled to later

sailings.

The alternative is that the carri-
ers swallow hard and watch as their

bottom lines come in considerably

lower than anticipated and budget-
ed. And we aren’t talking a few mil-
lion dollars — hundreds of millions,

even billions, are at stake industry-
wide. Can they start another six-year

industry losing streak as they did
between 2011 and 2016?

All the while there is a clamoring
for improved services — from transit
times, ports, and points served, to
new technology. Certainly, most
carriers are pursuing technology
upgrades. Faster transit times are
getting some play, and one wonders
how long it will last if fuel prices
continue to rise. The situation is the
same with ports and points served,
which are greatly impacted by
fuel-associated costs, including the
inland and repositioning costs.
These issues weave their way
into a situation in which ocean
carriers, knowingly or unknowingly,
push more cargo to third parties.

Although the ocean carriers essen-
tially signed many contracts with

no provisions to recoup significant
cost increases, my contacts in the
third-party world took a different
approach. Asked to provide the same
terms as the carriers, the replies
were generally “no.”
Non-vessel-operating common
carriers and forwarders know that
when the peak season comes, and
they are paying spot market rates
with a fuel charge, they will get
space and be able to provide that to
shippers who need it — and at their
normal margins.
How much of this have carriers
thought about? The first-quarter
results reflect decisions made in
the first four months of 2017. But
the service contracts implemented
on May 1, 2018, reflect well-known
cost factors to the decision makers,
which by all indications are going to
produce some disappointing results
to the carriers and their investors. It
all sounds eerily familiar, like 2011
through 2016, just after a good year
in 2010.
History is repeating itself
again.

Evaluating the reality of ‘game-changing’ technology

The Journal of Commerce | February 19 2018
by Gary Ferrulli

MAERSK AND IBM joining forces for a blockchain project, and CMA CGM’s plans for Ze Box, a self-described “incubator” for tech start-ups, have captured recent headlines As one who grew up well before the technology era, I had to learn the value of having the right technology to support the right processes. I used the knowledge gained at a Harvard process improvement class to help me in leading Sea-Land Service’s transition into a major technology and process change in documentation and customer service, upgrading most of the legacy software developed in the 1970s and 1980s. We wound up with a virtually paperless environment internally, using scanning and data storage, and this as more than 23 years ago. A lot of effort and money were required to do it all in four years.

It was a game changer for Sea-Land, saving the company $21 million a year after full implementation in 1996 and 1997. Error factors went from 5 percent to less than 1 percent, and turn times improved to having 90 percent of all documents done within 24 hours of receipt of the shipping instructions.  A majority of the remaining 10 percent took longer because the shipping instructions didn’t match the booking; clarification was needed.

As I hear about technology being the game-changer in logistics, I am certainly open to the thoughts, but recall the caution of the Harvard professors who taught the classes on process improvement — first make sure you have the right processes, and then build systems that support those processes. Don’t jump to “let’s automate the process. At Sea-Land,
we did a thorough review of the order-to-cash processes, taking two months, and using a dozen people to
review the different processes in all Sea-Land offices in North America.

Today’s headlines and articles tout technology claims to be the next sliced bread. Looking at a list of vendors promoting “visibility” products and services, I found 30 based in Europe, 43 in North America, and the existence of 13 others. We have seen and heard a lot of discussion on the need for supply chain visibility. The blockchain is supposed to — what — for visibility in the supply chain? What will these 86 vendors provide?

It was one thing for Sea-Land to take the order-to-cash process and refine it, and then build the required technology solutions to support new process — which is a shipment, by the way. The booking information flowed to equipment control, intermodal if required, terminal services, documentation (which is where rating and billing were done), freight invoicing, credit and collections, and accounting. Along the way, any variations caused a “red flag” and human intervention to clarify the differences. And our customer service people could look at the shipment at any time in the process by referring to booking number, container number, even a shipper’s purchase order.

It’s quite another thing to get visibility in the complete supply chain — raw materials to the ultimate delivery. What about a container on the eighth tier underdeck of a 20,000-TEU ship? Everything around it is steel.

Blockchain will capture all the data that is input, allegedly in a secure environment. But will all in the supply chain provide the input? And how many variations are there in blockchain? There are no uniform standards governing blockchain; all providers will have their own. How might a shipper of green widgets use it if they have four ocean carriers, 13 truckers, three railroads and eight warehouses, just in North America, moving raw materials and products through the supply chain in 38 countries?

This isn’t meant to criticize or denigrate blockchain or any other technological product or service. It’s to demonstrate that there are no silver bullets; the Lone Ranger rode off into the sunset long ago. Of course, the technology solutions cover far more than visibility. There are many excellent technology solutions that support the many aspects of logistics today.

There are solutions to pieces of the puzzle, and each entity must do extensive analysis on what they truly need to make the improvements they require, not just desire. That means performing a deep dive on process analysis and improvement first, then developing or finding the supporting technology that best meets the requirements. You may find some great solutions to your requirements, but don’t confuse those with solutions looking for a problem.

Mistakes in the selection and implementation can be extremely costly. Sea-Land spent more than $60 million to gain the
efficiencies and upgrade its legacy systems over a four-year period. It was a well-spent investment. That’s what we are talking about, investing for efficiencies and improvement — not just automating pieces of the supply chain because it is in vogue.

Get value for your company, but know it takes hard work, resources, and complete understanding and agreement on what you are trying to achieve. Then find the best solution.

Good luck.

January 22 2018 | The Journal of Commerce

by Gary Ferrulli

Looking  at what I forecast in my January 2017 column, I’d say I didn’t do too bad in reading the tea leaves. My vision was for volumes to grow at a modest pace, and rates to increase slightly, mostly because of Hanjin’s departure from the industry. Better-than-expected global trade growth and a relatively aggressive pricing stance early in the year led to most carriers showing an enhanced bottom line and profitability, something that hadn’t occurred in the previous six years. However, the market continues to dictate rates, with carriers reluctant to manage capacity through idling vessels or turning them back to their non-operating owners, relying on shortterm sailing cancellations instead. So, what can we expect this year? Significant new capacity will come into service in the first half of 2018, and experience tells us that this usually keeps pressure on rates. With the very top-heavy ocean carrier industry that has emerged, four or five carriers will have the potential strength to stabilize or even raise rates. Again, from experience, new capacity seems to carry the day, or year. We’ve watched carriers bring on new capacity for years, much of it the 18,000-TEU and larger vessels. They simply replace the 10,000- to 14,000-TEU ships one for one, then cascade those down into trades where 6,000- to 10,000-TEU ships are used — one for one. The results are those to be expected — rate volatility and poor bottom line results. Will that trend continue? It appears so, as the three alliances position themselves to sustain or enhance their market positions. The early Chinese New Year has caused spot market rates to rise as volumes strengthen during what is normally a lull in the market after Christmas. The lull will hit after plants in Asia close as the New Year holidays occur. Somewhere in all of that comes the traditional trans-Pacific contract negotiating season; it remains to be seen how that turns out. I believe there will be increases to contract rate levels, but not large ones. The capacity management issue creates a scenario that will greatly influence the negotiations as BCOs will be aware of the volatility of the spot market that will occur, and they don’t want to face spot market rates below, or well below, their contract rate levels. But I do expect some increase to the contract rates; it then becomes a matter of what carriers do to the spot market rates. Will BCOs press more for “services”? We hear a lot about the need for guaranteed space, especially in specific times of the year. Are they going to press carriers for that? There are third parties now selling that facility to BCOs, a noble effort to assist some who need it, but why can’t they do it themselves? Eleven years ago, I negotiated into contracts guaranteed space at specific times of the year for a then major retailer, with two-way liquidated damages for non-compliance. It was an anomaly then, and I believe it still is. Contracts for the most part continue to be rate sheets with a lot of legalese included. It worked for us; we got the space we needed when and where we needed it. If that is a main concern for BCOs or other shippers, why don’t they negotiate it into the contract. Looking at the third-party offering, carriers are likely to be willing to accept a similar offering from shippers. Again, what are contracts really for? Besides the usual rate issues, what else will we see in 2018 affecting both shippers and carriers? Technology enhancement is as hot of an item as I have seen pursued in many years. While acknowledging that the ocean carrier industry is lagging most of the rest of the business world in technology, what very specific things are needed to resolve the issues being raised? Visibility is one hot topic — where is my cargo? Visibility is an age-old problem; after the containers leave the ocean carriers’ facilities, they literally seem to reside in a black hole. Yes, we know that the container was interchanged to a trucker or railroad on a certain day, but then what? We do have access to estimates of time of arrival, but no real verification of where the container is. Visibility of the supply chain is a far different animal than “where is my container?” Solving that one issue (not easily done) may be a step in the right direction, but let no one be fooled into thinking it solves supply chain visibility. Several other key issues will again be faced in 2018, and not resolved. Why can’t I get a confirmation of a booking when I make the booking? If you book cargo, will you make sure it shows up? Why are there so many variations of chassis supply? Will there really be labor peace — and at what price? What about terminal automation and productivity improvements, getting the US at the same relative productivity levels as the rest of the modern world? Will there be Infrastructure improvements at ports and elsewhere? Will there be enough drivers to move a growing freight market? Let’s see how well we do at reading the tea leaves.

Scratching the Surface,

American Shipper Magazine  |

by Gary Ferrull

Continuing Conflicts

by Gary Ferrulli

Conflicts between carriers and shippers almost seem like a natural thing, unless you really think about it.

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Look At What’s Coming

by Gary Ferrulli

2016 was a year of shake ups; mergers, buy outs and a failure. And then announcements of new Alliance formations and the concomitant service changes coming in 2017 and 2018.

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