TPM 18th - Enforceable Commitments Where the industry needs to go? How we can jointly increase efficiency?

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

8. 8
Thank you
for your attention!

9. 9
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