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TOC Europe day 2 – Shippers weigh risks of carrier uncertainty

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Hamburg Messe

Hamburg Messe

TOC Europe hears global shippers are concerned over carriers’ current financial plight

Hamburg 16.06.2016 – Global shippers outlined the risks posed by container shipping lines experiencing financial difficulties on day 2 of the TOC Europe Conference & Exhibition, taking place this week at the Hamburg Messe, Hamburg, Germany.

They also urged carriers to develop a wider array of services that they offer shippers.

Speaking in the TOC Container Supply Chain (CSC) conference, Rolf Niese, head of logistics operations at British American Tobacco until recently, admitted that many shippers have “celebrated” the lowest freight rates seen in living memory but added that the response of carriers to consolidate presents huge challenges to those operating global supply chains.

“With all the M&A 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, ” he said.

Mr. Neise added that shipping lines need to imitate the freight forwarding sector and offer a greater range of services as well as differentiating their service offering from competitors.

“What we are seeing in the 3PL 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.”

“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 on the sidelines of conference that carriers’ problems also pose huge difficulties for shippers. The danger is that cargo could get blocked and it is then extremely difficult to retrieve it.

“In a lot of cases these goods are already sold to our customers and we are not able to manufacture them again because everything we do is based around inventory, and we are selling out of that inventory to customers who are waiting for their goods.”

Mr. Degroote said Black & Decker has traditionally employed 3PLs to manage its supply chain but due to continuing pressures on the company’s inventory, it is now building its own LCL boxes and is increasingly looking to contract directly with carriers.

“However, if carriers want to play a bigger role with Black & Decker they will also need to provide some of the services that the 3PLs provide, ” he said.

Bulk ports showcase

Running parallel to the CSC conference, the Bulk Ports & Technology conference put safety and environmental best practice at the forefront of discussion.

Andres Gomez Bueno, who sits on the Executive Committee of the International Dry Bulk Terminal Group (IDBTG), outlined what the IDBTG is doing to improve safety and mitigate risks in dry bulk handling and transportation.

Two key issues the group is currently working on are identifying and minimising the risks for cargo liquefaction during transportation in accordance with the International Maritime Solid Bulk Cargo Code (IMSBC), and identifying and managing cargo that may be harmful to marine environments (HME), also in accordance with the IMSBC.

Shippers, terminal owners and operators, together with vessel owners and operators, are working collaboratively with national and international regulatory authorities to improve the safety and environmental outcomes for the loading, unloading and transportation of cargoes, he said. Ultimately, this should result in best management practice being adopted and regulated in the IMO IMSBC.

Later in the day, David Huck, Port Director of Peel Ports Group, gave a case study of Port of Liverpool’s new Biomass Facility.

The facility forms an essential part of the supply chain for biomass feeding the Drax power station, the UK’s largest single generator of renewable electricity, accounting for 50% of all station generation today.

The station delivers a carbon saving of 80% across the entire supply chain compared with coal, Mr. Huck stated.

A constant issue in handling dry bulk commodities is dust which is generated at any point in the logistic cycle. Cameron Hay, Chief Sales Officer at RAM Spreaders, ran delegates through how the application of the firm’s new spreader technology enables shippers to adopt Containerised Bulk Handling (CBH), in such that dust generation is all but eliminated.

Advantages of CBH include lower set up costs – without the need for conveyors, shiploaders and storage sheds – and zero dust, which negates clean-up costs. The system is also virtually man-less in terms of operation, he said, with loading rates of 1, 700 tph per crane.

Celebrating its 40th anniversary TOC Europe 2016 continues on Thursday at the Hamburg Messe, Hamburg, Germany.

About TOC Worldwide

For nearly 40 years, TOC Worldwide has provided the market-leading conference and exhibition forums for the global port and terminal industries and their customers. With a change of name to TOC Container Supply Chain, the TOC event portfolio is now evolving fast to attract a wider audience of container supply chain professionals.

Taking place each year in the world’s four key shipping hubs – Europe, Middle East, Americas and Asia – each TOC is now a complete container supply chain event for its region, bringing together cargo owners, logistics providers, carriers, ports, terminals and other key members of the container supply chain to learn, debate, network and foster new business solutions.

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