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Time to bring back the shipping manager? The good old fashioned shipping manager is due for a revival says Dr. Andrew Traill of the Shippers’ Voice


These days, relatively few firms have senior managers responsible for moving the company’s goods in or out of the country. Very often, the position has


been ‘outsourced’ to a freight forwarder, the argument being that the latter could look after the company’s interests in dealing with shipping lines, airlines and the like, and human resources managers were only too happy to reduce their headcounts. But was this a mistake? Andrew


Traill thinks it might have been. “You do need senior people in-house who understand this business, and have the ability to manage it,” he argues. “Shipping managers are effectively risk managers and they need a lot of


skill, and strength of character too, to deal with both the ‘fire- fighting’ parts of the job and also the strategic aspect. If you leave everything to your freight forwarder, you would have to take their word for what they say, which might not always be wise.” Even if the shipping manager


is on top of the job, they often are quite junior people who don’t have the ear of senior managers in charge of the company’s strategic direction. Odd when you think about it, because a bad decision on their part could punch a nasty hole in the company accounts. Equally, a good decision by the shipper can save the company thousands, if


not more, and help retain or win new business from a satisfied customer. The lack of knowledge and expertise is not just an issue for smaller firms; expertise in many large multinationals can also be surprisingly sparse, says Andrew Traill. “Wearing my Shippers’


Council hat, I see and speak to many shippers at meetings. These people are enormously skilled and knowledgeable on all aspects of freight transport and in dealing with suppliers. I have the utmost respect for them, yet I can become enormously frustrated for them as too often, unfortunately, these skills go unrecognised by their


own companies. Some equally knowledgeable and experienced shipping managers will very often be in quite a lowly position, and very likely combining the role with other duties.” (Note that we are not talking


about logistics managers, who while they may run very complex and sophisticated supply chains within the UK or Europe, may have little visibility or control over goods while they are on the high seas or in the air.) Perhaps shipping needs a


culture change, says Traill. “We need to recognise the importance of the role, of the skills and knowledge required and the people doing it. And rather than have people being thrown in at


Supply chain collaboration is not for the faint-hearted


by Dr.Andrew Traill


Supply chain collaboration is fast becoming the buzz- phrase among supply chain and freight professionals. But having organised and participated in a number of events and discussions recently on the subject I am not convinced that it will suit everyone. It is a lot harder to successfully achieve than most people think. At the recent Shippers’ Voice Seminars at Multimodal


2010, we explored the subject in depth. (Many of the presentations are available at www.shippersvoice.com and some sessions were videoed.) Collaboration is about two or more parties working together to create more opportunity and efficiency than they could achieve on their own. Of course, such collaboration cannot be anti-


competitive. It must work within the competition rules of the EU and other parts of the world. So it has nothing to do with jointly manipulating or distorting the market. The reason so many shippers are turning up to events


about collaboration is testament to their openness to new ways in which they can find cost savings and improve efficiency, and a measure of the pressure they are under to do so. Collaboration in the supply chain, even with your competitors, is nothing new. Indeed it often happens subliminally, with freight from different companies on the same truck, train, plane and ship. If shippers thought about this they might be able to gain more advantage from this. However, most take it for granted. There is also confusion between collaboration with


other companies with similar supply chains, and business partnerships with those companies and service providers in your supply chain. To me, the latter is widespread, and could be improved in many cases, but is not the same as true supply chain collaboration. Finding other companies to share your supply chain in


whole or in part is quite a different matter. To share it with a competitor is far more complex. I remain unconvinced, except in a few and well publicised cases, that supply chain collaboration with one’s competitors is going to be particularly widespread. It raises challenges, operationally and psychologically, which many individuals and their companies will not be able to overcome.


Many will view collaboration as means for gaining competitive advantage: if that is the case, how can you share a supply chain with a competitor who will also achieve similar benefits? Supply chain collaboration requires products and


freight to have similar characteristics, the companies involved to have similar mindsets and culture, open lines of communication and essential data sharing; the products’ journey needs to be very similar for collaboration to work. Chief executives and chairmen of collaborating companies also need to trust each other over the long term: you cannot have directors or chairmen of the board falling out with their opposite numbers in the other company. Collaboration must be sustainable to work and


cover the significant investment of time, personnel, IT development and operational management required to establish supply chain collaboration. It adds complexity, which also adds cost. Having said all this, it is clear that there are significant benefits where it can and does work. If you accept, for example, that a competitor really


only becomes a competitor once the goods are in front of prospective customers, the chain before that point can be shared. Examples such as Kimberly Clark and Unilever, Nestle and United Biscuits, and many other household names such as Proctor & Gamble, Pepsico, HJ Heinz, GSK, Sara Lee and Colgate-Palmolive all indicate major success from supply chain collaboration with competitors. Smaller companies too, may benefit from collaboration


in order to overcome the handicap of size when it comes to winning and keeping contracts. Even logistics service providers and carriers can (competitively) collaborate, as in liner shipping, air freight and logistics. However, many look to the 3PL and 4PL sectors, or even carriers, as having most to offer by facilitating and managing collaboration for their customers. Some have said they have been slow in recognising


this. Critics say they have focused too long on ad hoc price cuts, track and trace, and not enough on taking cost out of the whole business for their clients.


the deep end, learning on the job, perhaps there should be something more structured. And perhaps it ought to be given a proper professional status, just as in functions such as marketing or accountancy.” This is another problem. There


is no one single place in this country or in Europe where you can learn the necessary skills to become a shipping manager. The expertise is available,


but you would have to go to many different organisations to acquire it, such as the shipper’s councils, BIFA, the Institute of Export or the Chartered Institute of Purchasing and Supply, and certain universities and colleges. There could be a commercial


market for a unified training package, Traill believes, though it might take a while to build it up. Shippers councils in some countries, notably Singapore have set up learning schemes, but there is nothing similar available in Europe at the moment. But, he adds: “If anyone wants help kickstarting the idea, I’m very happy to see if I can help.”


Do you really wish it could be Christmas every day?


Christmas seems to be getting earlier every year but customers of the liner shipping industry are not celebrating, says Andrew Traill. With Maersk Line announcing a hefty peak season surcharge from mid-July, what some people still insist on calling the season of goodwill now seems to last for at least six months of the year. What really irks the Shipper’s Voice boss, though, is the lack of consultation and advance information from the shipping lines about surcharges. “It continues to stagger me that all these increases and surcharges are presented as a fait accompli, leaving shippers out in the cold, he told FBJ. Lines still don’t explain to us how they arrive at these figures, and there are still more questions than answers.” Dr Traill believes that there is still a fundamental lack of consultation between the big container lines and their customers. Rate rises are being imposed “even before they’ve had a conversation with their customers.” The sudden increases, including threatened extra charges to cope with an alleged shortage


of containers, suggest that the shipping lines themselves aren’t in proper control of their own businesses, he says. “Volumes aren’t actually any higher than they have been in previous peak seasons and are certainly well below what they were in 2007 and 2008. This has all happened because lines have either reduced capacity by taking ships out of their fleets, or because they’re slow-steaming. And they haven’t invested in new boxes.” Now the lines are having to resort to taking ships out of lay-up in order to use them to


ferry empty containers back from Europe to the Far East – though no doubt many of them are continuing to slow steam, which simultaneously reduces capacity and upsets customers who want their goods in a hurry.


“It all smacks of bad management and even worse public relations,” fumes Mr Traill. Perhaps the lines need to look again at their pricing structures. It could be that prices in


the off-peak period are actually too low and it is this that is leading to the unseemly scramble to impose surcharges whenever demand picks up a little. “If you take on business, surely the freight rate should at least cover your basic costs, so you shouldn’t have to put on any surcharges. So does this mean they aren’t doing that at the moment?” Traill also questions whether shipping lines


know enough about their customers’ business. “How often do they ask them what their predicted demand levels will be? In my experience, rarely or never. And if you don’t understand your customers it can be quite difficult to take decisions on things like pricing, or to negotiate properly.” While it is true that many shippers find it difficult


to make long-term forecasts, getting some idea of what their future demand will be shouldn’t be impossible. “There is some very good general market information available. So it should be possible to make reasonably accurate predictions of demand, which in turn gives you a better understanding of how to manage supply.”


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