The strained supply chain industry is top of mind for most retailers and manufacturers as they face unparalleled demand coupled with new regulations creating even greater capacity issues.
Instead of forfeiting customer opportunities or sacrificing service options, Manhattan Associates, Inc. maintains that supply chain managers need to take a strategic rather than tactical view of operations and adapt to become “a shipper of choice.”
According to Manhattan, a shipper of choice is willing to collaborate with carriers, mitigating traditional tensions for the good of both parties. Instead of being competitive and at odds with carriers, these strategic shippers will have carriers flocking to them, thus finding new openings and solutions.
A key component to becoming a shipper of choice is having enough visibility needed to take a broader, smarter view of the network. Through this view, shippers will find that they’re still able to smoothly operate within the industry’s capacity issues.
Ron Lazo, vice president at Manhattan, tells Supply Chain Management Review that he’s seeing more shippers leverage their relationship with ocean carriers in the sourcing or procurement of capacity to gain the most economical rates and highest service levels.
“Historically, procurement events were a zero-sum game with respect to the price and service relationship and outcomes between shippers and ocean carriers,” says Lazo. “We’re now experiencing a more collaborative and data-focused sourcing approach as shippers work to provide carriers with greater visibility to both their current and forecasted network volumes that provides mutual opportunities for efficiency savings and service advantages.”
Furthermore, says Lazo, there’s greater willingness for both parties to work with emerging solutions and cloud technologies. “As a consequence, the business-to-business process between the shipper and carrier can be more efficient, transparent, credible and value-focused,” says Lazo.
Leveraging within a carrier consortium is more challenging, admits Lazo, but it can still be done by exerting pressure on the market by combining carrier volumes, resulting in competitive rates, capacity assurance, and improved service levels.
“These benefits are available to shippers of all sizes by their participation in the consortium versus working independently with carriers,” he says.
Finally, even though most ocean carriers are operating today via alliances to unlock synergies through more effective utilization of shared capacity, price competition still exists in niche markets. and with speciality service offerings across alliance partners.
“Therefore, shippers should continue to maintain a reasonable degree of market leverage and control, near-term, as alliance partner relationships evolve,” concludes Lazo. “And it will soon become clear how they will coexist, long-term.”
About the Author
Patrick Burnson, Executive Editor
Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at [email protected]
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