Trends in Third Party Logistics – Hayes H. Howard, American Shipper.
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Transcript of Trends in Third Party Logistics – Hayes H. Howard, American Shipper.
Trends in Third Party Logistics
Trends in Third Party Logistics
– Hayes H. Howard, American Shipper
Trends in Third Party Logistics
Concept
– Hayes H. Howard, American Shipper
Asset Heavy Provider
Asset Light Provider
Shipper: out sources logistics management
Shipper: in-house logistics management
Trends in Third Party Logistics
Threads
What are we looking for in a relationship?
How to achieve inventory management and control?Visibility Integration
– Hayes H. Howard, American Shipper
Trends in Third Party Logistics
Speakers
Michael Connor - Logistics Sr. Manager, World Wide Procurement, Dell, Inc.,
Klaus Schnede - Manager, Marine
Procurement, Eastman Chemical Co. Edward Zaninelli - Vice President
Transpacific Westbound Trade, OOCL Jeffery G. Lee - Managing Director - North
America, Vanguard Logistics
– Hayes H. Howard, American Shipper
Trends in Third Party Logistics
Participation & Questions
You are a key member of the panel!
Trends in Third Party Logistics
Thank You
First upMichael Connor, Dell, Inc.
– Hayes H. Howard, American Shipper
Trends in Third Party Logistics – Michael Connor, Dell, Inc.
- How did it start and why?
What are we looking for in the relationship?
- Acquire the business
- Maintain the business
- Grow the business
Trends in Third Party Logistics – Michael Connor, Dell, Inc.
1999 2000 Future
•Limited Structure•Supplier Free for All
•Improved Structure•Suppliers Picked from8 Providers
Consolidate volume To optimizeAir spend - regional
2000-2007
Consolidate volume to optimize ocean spend - regional
Consoli-date whse3PLs
StandardizeT & Cs globally
Dell DSI 35
Dell DSI 35
Dell DSI <.5
Dell DSI <.5Sup DSI
0
Sup DSI 0
Sup DSI 11.7
Sup DSI 11.7
Core global Providers ID’ddrive efficiencies And visibility
Globalize volume to optimize trans spend
JIT-DHO
W?
WH
Y?
Trends in Third Party Logistics – Michael Connor, Dell, Inc.
Acquire the business:
- Demonstrate the value of your core competency
- Partner to develop the business case
- Integrity must be obvious
- Show global scalability
- Demonstrate financial strength
Trends in Third Party Logistics
Maintain the business:
- Maintain service levels
- Your IT must scale ahead of customer
- Partner in Project Management
- Show global scalability
- Drive Financial Acumen to the lowest levels
– Michael Connor, Dell, Inc.
Be W
illin
g to W
alk
Away
!
Trends in Third Party Logistics
Grow the business:
- Service both ends of the supply chain
- Expand in the right areas – you have a core competency too!
- Grow globally ahead of customer
- Be willing to partner with other 3PLs to service the customer
- Be Ready!
– Michael Connor, Dell, Inc.
Trends in Third Party Logistics
Wrap-Up:
- Everyone knows the game – act like it and put it on the table
- You are better positioned to manage the logistics – your actions must prove it
- Executive Alignment is a must to grow
- Be Prepared ahead of your customer – that’s what we really want
– Michael Connor, Dell, Inc.
Trends in Third Party Logistics
Thank You
Next UpKlaus Schnede, Eastman Chemical
– Michael Conner, Dell, Inc.
Trends in Third Party Logistics
Klaus Schnede May 2007
– Klaus Schnede, Eastman Chemical
Trends in Third Party LogisticsTrends in Third Party Logistics – Revising Logistics Trend…..?Table of Contents
1. Introduction2. Cendian Corp. – History3. Eastman Today – - Forwarder Relationship - Controls back in-house - Inventory Control and Management - Security and Compliance4. Conclusion
– Klaus Schnede, Eastman Chemical
Trends in Third Party Logistics
2. Cendian Corp. - History
NVO/3PL Founded in 2000 as ShipChem Started as Eastman's domestic and
international logistics arm/network Focused on the chemical market 2003 expanded into other chemical
customers as 3PL Not able to meet profitability goals Off the shelf IT-Systems not fully capable to
support the business Dissolved in 2005
– Klaus Schnede, Eastman Chemical
Trends in Third Party Logistics
Eastman Today - Forwarder Relationships
Using three Forwarders for our business today; set up by destination region
Mostly used for documentation Some bookings are still made with the
Forwarders; most bookings are through INTTRA
Letter of credit support Destination customs clearance and
warehousing
– Klaus Schnede, Eastman Chemical
Trends in Third Party Logistics
Controls back in-house
Eastman rehired most of the operations Cendian employees
A handful of Cendian procurement professionals were hired by Eastman
Total control of all domestic and international transportation is back in-house
Vendors are being measured and held accountable
Freight is being negotiated by Eastman
– Klaus Schnede, Eastman Chemical
Trends in Third Party Logistics
Inventory Control and Management Performed by Eastman, in-house
Warehouse and Container Management Performed by 3PLs
Dedicated Container Truck Fleet Management Outsourced today
– Klaus Schnede, Eastman Chemical
Trends in Third Party Logistics
Security and Compliance
Handled in-house Only working with certified vendors on a
global basis Member of American Chemistry Council and
a preference for Responsible Care® carriers Only use C-TPAT certified carriers Chemtec for hazmat response
– Klaus Schnede, Eastman Chemical
Trends in Third Party Logistics
4. Conclusion – The Future…..?
Eastman's Logistics seeks smart sourced solutions in the future. Outsourcing decisions will be made selectively on tactical functions that can be done better by 3PLs. Core functions however, such as Strategy, Procurement and Management will not be outsourced.
– Klaus Schnede, Eastman Chemical
Trends in Third Party Logistics
Thank You
– Klaus Schnede, Eastman Chemical
Next UpEdward Zaninelli, OOCL
Trends in Third Party Logistics
South CarolinaInternational Trade Conference
Edward ZaninelliOOCL USA
– Edward Zaninelli, OOCL
Trends in Third Party Logistics
TRANS-PACIFIC TRANS-PACIFIC 18 million TEU18 million TEU
10.4 % Growth10.4 % Growth
ASIA-EUROPE ASIA-EUROPE 12.2 million TEU12.2 million TEU
10.9% Growth10.9% Growth
TRANS-ATLANTIC TRANS-ATLANTIC 5.4 million TEU5.4 million TEU
5.3% Growth5.3% Growth
INTRA-ASIA INTRA-ASIA 33 million TEU33 million TEU(including Australia, (including Australia,
Indian Subcontinent and Indian Subcontinent and Middle East)Middle East)
12 % Growth12 % Growth Source: Drewry Consultants, 2005
OTHER TRADESOTHER TRADES
North-South North-South 19.2 million TEU19.2 million TEU
Intra-RegionalIntra-Regional16.1 million TEU16.1 million TEU
Global Container Trade PerspectiveGlobal Container Trade Perspective– Edward Zaninelli, OOCL
Trends in Third Party Logistics – Edward Zaninelli, OOCL
Trends in Third Party Logistics – Edward Zaninelli, OOCL
Trends in Third Party Logistics
U.S. Liner Shipping LandscapeU.S. Liner Shipping Landscape New mega ships increase trade capacity
Global trade growth outpaces infrastructure including ports, railroads, terminals, trucking and warehouses.
Cross-industry collaboration synchronizes transport activities to improve efficiency and service quality
Trade imbalance: imports approach 3 x export volume
Export becomes a cost recovery business model
Terminal, transportation and fuel cost increases affect carrier profitability, products and services
– Edward Zaninelli, OOCL
Trends in Third Party Logistics
Trends in Third Party Logistics
Round Trip unit income under pressureRound Trip unit income under pressure
Source: Drewry
– Edward Zaninelli, OOCL
Trends in Third Party Logistics
Where do the Carriers Stand
Profits have been compressed by internal and external forces
Fuel costs, environmental challenges, limits to NAT Infrastructure and more
Some Carriers trying to make the jump from liner mentality to logistics management
Historical results of the carrier/3PL is mixed or clouded
Major challenge to be a multi carrier 3PL when you are a carrier
– Edward Zaninelli, OOCL
Trends in Third Party Logistics
Carrier Trends in Logistics
Inclusion of the entire sales force in the logistics strategy, does this work?
Can liner sales sell logistics? Will the trend continue? Most carriers opening up 3PL shops, but
many are on a small scale Two largest carrier 3PL groups may not be
profitable or are marginal
– Edward Zaninelli, OOCL
Trends in Third Party Logistics
Carrier Logistics/Asset Owners/Closing Remarks
Do we do it for the money? Do we do it for the tie in? How do Asset owners see 3PL opportunities How does an Asset owner compete with
non Asset owner logistics There’s money in logistics management Can Carriers access logistical dollars to
compete with non Asset owners for profit???
– Edward Zaninelli, OOCL
Trends in Third Party Logistics
Thank You
Next UpJeffery G. Lee, Vanguard Logistics
– Edward Zaninelli, OOCL
Trends in Third Party Logistics
Logistics: Warehouse to Boardroom
Trends in Third Party Logistics
Examine your supply chain
Trends in Third Party Logistics
Trend behind the trend
Shoes: $0.34 of $45
TV: $12.50 of $2000
Motorcycle $90 of $11,000
Trends in Third Party Logistics
Challenges
Inefficient sourcing due to lack of cost info
Higher inventories or lost sales
High cost of expedited freight
High overhead cost managing logistics functions
Inbound lead time variability
Reactive rather than proactive management
Disconnect between various transport modes
Trends in Third Party Logistics
Needs and Solutions Reliability Overall Cost reduction End to end Visibility Speed/ Tighter controls Flexibility Global Coverage Predictability Optimization/Data
warehousing Deeper integration
Trends in Third Party Logistics
Industry Response
Visibility Predictability Scope
Trends in Third Party Logistics
Thank You
Next Up
You!
– Jeffery G. Lee, Vanguard Logistics
Trends in Third Party Logistics
Questions