In the run-up to next week’s TOC Container Supply Chain Europe, conference editor Neil Madden talks to Nissim Yochai, VP customer relations at ZIM Line
TOC: What do you see as the main challenges to successfully executing the logistics chain?
NY: Obviously, the main challenges the industry is facing these days are overcapacity in the market, rising fuel prices and decreasing demand. All of these parameters are working against shipping companies. As a result, the carriers are pushed to implement operational efficiency steps at all costs in order to survive, which eventually might reduce the level of service provided to customers.
Slow steaming as a fuel-saving device, cutting back on customer service personnel and reducing capacity in the market by idling ships and postponing new buildings, are all measures taken by the carriers in order to cope with market challenges. In the long run, structural changes in the market might have a negative effect on customers, including increased rates and limited levels of service and choices.
What do you consider as the prime responses & priorities for managing a volatile/changing global transport environment?
The ability of most industry players to influence large-scale global market trends is very limited, so companies must concentrate on improving their efficiency to a level that will enable them to survive. At the same time they also need to take a good look at their strong and weak capabilities, and based on that, to define a strategy for long term sustainability.
If you could wish for 2-3 things from your transport chain partners/suppliers, what would they be?
We need a win-win approach from our suppliers in order to increase efficiency and reduce costs for all. This requires a new state of mind and flexibility.
The carrier-shipper relationship needs to undergo a serious transformation, from ‘transactional’ to ‘relational’. Better visibility on both sides of the equation – the requirements of the shippers versus capabilities of the carrier, and a tight integration of the whole supply chain, would benefit all.
[The] execution of the logistics chain has become a commodity. All the carriers are doing this and are aiming to maximise operational efficiency. This tendency has increased over the past four years, with the recession of 2008 and the volatile markets seen thereafter. In the race to cut costs, one major issue was neglected – the customer. Revenue per TEU, vessel utilisation, fuel optimisation – all these KPIs that are managed by the carriers took the driver’s seat, while the sales and customer service teams were reduced. Our main challenge today is to regain the focus on the customer – what does he need, how we can serve him better, what tools and procedures do we need to develop internally in order to strengthen our relationship and thus increase the wallet share and profitability.
