With today’s global supply issues, strong relationships are vital
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In late April I attended the Journal of Commerce’s Breakbulk and Project Cargo Conference and while the global supply chain issues may be improving, the cliché, ‘it ain’t over ‘til it’s over’ is unfortunately true.
Although the situation has definitely improved, optimism is tempered as all parties seem to agree that the general issues plaguing the global supply chain – from ports congestion to demurrage and detention delays coupled with rising freight costs to labour and trucker shortages to lack of container capacity – will all continue through 2023. Every session of the conference highlighted the escalating costs across each facet of the supply chain, with one panellist noting that carriers have costs today that they did not have five years ago.
Brian Jones, international logistics manager, Nucor (which oversees both containerized and breakbulk cargo), during his panel session, ‘Adapting on the Fly: Landside Lessons Learned in the Spillover Market,’ mused that in 2020 the entire world woke up to learn what ‘supply chain’ is, “now everyone knows.”
In a session titled, ‘Next Normal Contracting: Project Logistics Contracting in a Rapidly Evolving Market,’ panellists discussed some of the changes taking place in logistics/shipping since 2020. Richard Seeg, president, Intermarine (a carrier) said that because no one saw Covid coming, a lot of contracts did not have Covid/coronavirus clauses. “Now we’re incorporating new wording into contracts and coming to new agreements with customers.”
And while the new contract clauses are good, they present new issues. Jake Swenson, regional vp, DHL Industrial Project Group, Americas Operation, explained that now everyone has their own Covid clause and even war risk clauses. “Before it was pretty much all the same. Sometimes there are even certain insurance/liabilities that are specific to regions. This presents new challenges because there are no templates.”
Perhaps the biggest takeaways from the two-day event in New Orleans, Louisiana (a major port city for coffee in the United States) – the same sentiments that are prioritized in the coffee and tea industries – are the importance of communication, transparency and relationships throughout the entire supply chain.
“If we continue to work and shed data in unstructured ways, will continue to be unproductive,” said Matthew Costello, CEO of Voyager Portal in the session ‘What Works: Creating Data Transparency and Visibility in the Project Supply Chain’. “Having collaborative conversations – transparency with data – can result in a more productive ROI.”
Fellow panellist Darren Shelton, chief product officer of FuelTrust, pointed out that technology today will not allow “the model we had in the past to go forward. Everyone is incentivized to be more transparent,” adding, “the data is out there and able to offer transparency without sharing proprietary information.”
The ‘Adapting on the Fly’ panel session focused heavily on the importance of relationships — cultivating and maintaining them.
“This is a relationship business,” said Jones. “If you do not have the experience or knowledge, make sure you know where to find it.”
Agreeing, Michael Ruediger, project director, Americas; Americas Pentagon Freight Services, added, “this is a relationship business. If you don’t know something, it is not a sign of weakness — seek the knowledge, cultivate a relationship.”
Janet Colley Morse, vp, The Dupuy Group, which started as coffee warehouse but evolved into a diversified global logistics and storage provider [Dupuy managed its first breakbulk shipment of coffee in nearly 35 years in 2021], echoed her fellow panellists’ comments that communication between all parties is vital. “Developing and maintaining those relationships are key so you can stand by your word and get [the job] done.”
However, Ruediger noted that relationships, business or otherwise, require a lot of work. “If shipper says [they] going to do something, then do it. Be a good partner.” Once the cargo has arrived, Ruediger urged, “if using flatbed trucks, unload and load quickly — do not let trucks sit idle.”
Jones stressed that carriers also need to be good partners. “If you are not going to hit deadline, communicate that. Everyone knows there are congestion problems at the ports, but you still need to share delays with shippers. You’re not doing anyone any favours but not communicating.”
Summing up the essence of the conference quite nicely, Ruediger said simply, “relationships matter now more than ever.”
- Vanessa L Facenda, editor, Tea & Coffee Trade Journal.
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