Whose supply chain is it anyway?
Shippers and logistics professionals question who is really in charge of the supply chain at TOC Container Supply Chain Europe
Rotterdam, 27.06.2013 – Do shippers really own and control their own supply chains? This seemingly surprising question was raised at a debate on Integrating Ports, Inland Terminals & Logistics Networks to Improve Supply Chain Performance, held on the second day of the 38th TOC Container Supply Chain Europe at the Ahoy in Rotterdam, The Netherlands.
Of course, it should be shippers themselves who determine their own supply chain strategy, the panellists said. However, the problem with the ‘integrated supply chain’ is that it is anything but integrated, stated David Charlesworth, Senior Advisor, Drewry Maritime Consultants. At present supply chains are still highly fragmented with multiple players – deepsea carriers, hauliers, forwarders, etc – all competing to be the lead logistics provider, he continued. Every interface between contractors is an opportunity for delay and additional stock holding, and there is a still a long way to go in terms of collaboration with all agents working together to meet the requirements of shippers.
Mr Charlesworth added that while the need for collaboration on inland transport is important, equally critical to the movement of cargo is the movement of associated data, and this is where much of the supply chain fragments. He concluded by listing the most important factors that shippers expect from logistics networks. Headline price will always be the most important initial consideration, but reliability of service is also a critical choice factor. At the same time service frequency is essential to provide flexibility of service.
Tom Tillemans, European Head of Logistics Network Development at global food company Heinz, said that surely one of the principal stakeholders in the supply chain is the end consumer, yet this is seldom recognised among logistics professionals.
Mr Tillemans’ main assertion was that supply chain collaboration does work when it is done properly. Heinz has chosen to collaborate with other major shippers – like Mars Group and Dutch brewing company Bavaria – in the Lean & Green Barge initiative. Together, the shippers involved aim to achieve critical mass to make barge shipping commercially viable with relatively small barges and over relatively short distances. After a series of meetings across The Netherlands shippers agreed to share data on flows to try and fill barges as much as possible on both the outbound and homebound legs. This has generated a database of potential flows with the resulting volume of containers being shipped growing now to 345,000 TEU. The number of participating shippers is expected to grow from 44 at the start of 2013 to 75 by year end, and the number of barge lanes operating will double to 10.
He cited a number of factors that will have big impacts on supply chain developments. A simple demographic factor is that there is likely to be up to 20% fewer truck drivers in Europe by 2020. This is critically important to the logistics industry, yet he sensed a lack of urgency in the industry to find new and alternative solutions. “We have to act now, not wait until the problem is upon us” he said.
Combined with increased congestion on the roads, higher fuel prices, and growing attention to corporate social responsibility it is now time to plan and act for the future. In fact, he said, many shippers will simply not wait any longer and will generate solutions of their own. It is up to the logistics and transport industries to catch up with these trends.
TOC Container Supply Chain Europe runs from 25-27 June at the Ahoy Centre, Rotterdam. The event includes tour of Rotterdam Port terminals, high-level container supply chain conference, free-to-attend TECH TOC container port operations and technology conference, BULK Ports & Technology seminars, a major exhibition of port and terminal services, equipment and technology, and industry networking receptions.