Shippers have stopped celebrating the lowest freight rates in living memory and now concerned about the uncertain state of container supply chains, according to Rolf Niese, head of logistics operations at British American Tobacco.
“With all the M&A [mergers & acquisitions] activity there is a lot of uncertainty. Firstly, we are not well informed; we do not know who is cooperating with whom and where, or who are on the M&A list. This in itself is a huge risk for us,” Niese said, speaking at the TOC Container Supply Chain (CSC) conference in Hamburg today.
Niese urged carriers to develop a wider array of services to offer shippers, and differentiate their service offering from their competitors, much like the freight forwarding sector has done.
“What we are seeing in the 3PL [third-party logistics] sector is that they differentiate their services, such as guaranteeing on-time deliveries. And we are always asked whether we would pay for it – yes we would, in fact we already do with our 3PLs,” the speaker continued.
“However, I’m of the opinion that more and more carriers are simply focused on their core business and not the end-to-end view, but we as a shipper are only interested in the end-to-end view of the supply chain.”
Filip Degroote, EMEA transportation director for Stanley Black & Decker, said carriers will need to provide some of the services 3PLs provide if they want to play a bigger role with Black & Decker.
Degroote’s worry is how his company’s inventory could be affected by carriers’ problems – any disruption could result in cargo being blocked and made difficult to retrieve.
Inventory pressures mean Black & Decker is now building its own less than container load (LCL) boxes and is increasingly looking to contract directly with carriers, rather than with 3PLS, which the company has traditionally employed to manage its supply chain.