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General Forum: Monday 2nd October 09.50 - 11.20 Simon Morse - Inchcape Shipping Services Holdings Ltd |
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SHIP AGENT'S VISION - A CONTRADICTION IN TERMS? "With a chain of agents stretching from Hormuz in the Persian Gulf to Goa in India, then Malacca near Singapore, and finally Ambon in the central Moluccas, the total trading fleet could be serviced, and all provisions procurred from the locality." Date: 1609 From: "History of the East India Company" by J Keay PRINCIPAL - CLIENT: Traditional role of Agent PRINCIPAL - CLIENT Symptoms: - Eroding margins - Loss of revenue - Decline in market share - Old "game" not working PRINCIPAL - CLIENT "The shipping agency market is fragmented and the traditional tole is limited in scope, undifferentiated and unregulated" Source IMO PRINCIPAL - CLIENT IT Revolution The Fork in the Road Incremental Change? Or Transformation World Sea-Borne Trade Chart Source: Chamber of Shipping
Annual Growth Efficiency Volume Expansion New Services Margin Erosion / Cost Inflation Operational KPI's 1992 - 1999 B/L Production % Customer Quality Index Efficiency Port Calls Containers [TEU's] Volume Shipping Services Agent/Client Perception Gap 1. Cash Management 2. Market Intelligence 3. Administrative Processes 4. Cost Control 5. Schedule Management 6. Local Knowledge 7. Quality Accreditation 8. Pricing 9. Emergency Response 10. Responsive/Friendly As perceived by client As perceived by traditional agent Necessary but not critical Important / of value
New Products Transport Sector Compound Annual Growth Rate Market Capitalism 1993 - 1997 Graph Source: Mercer Analysis Note: All figures US Companies except Ocean Shipping
Charterers Shippers Passengers Crew Vendors AT THE SAME TIME ...................... INFORMATION REVOLUTION PORT HOLES PORTALS OPPORTUNITY or THREAT? GIVEN..........................
WHY? Less than 2% of Worldwide Shipments EDI Less than 0.5% of Worldwide Shipment Browser based No one carrier more than 7% via EDI Only two carriers with Shipment processing site
Because..................
TOO MANY "ONE TO ONE" CONNECTIONS 1000SHIPPERS X 40 3PL's x 100 CARRIERS = 4,000,000 CONNECTIONS "ONE TOO MANY" 1000 SHIPPERS X 40 3PL's x 100 CARRIERS = 1,140 CONNECTIONS FOUR CHALLENGES
Transparency Disintermediation Value Speed Work Processes? The 'E'-Zone 1 Minute 1 Hour 24 Hours 3Days 1 Week 2 Weeks 1 Month 3 Months Cost Carrier 3PL Shipper Total Paper $120 $75 $20 $215 Automated $40 $28 $2 $70 Pricing? Total Savings $80 $47 $18 $145 Network Metcalfe's Law 10 90 100 9,900 Connectivity 1,000 999,000 PRODUCT RANGE
1. ASP FREIGHTMAN.COM Bli.COM CASHMAN.COM NACZ WORLD TRADE SYSTEM
2. FULFILLMENT PASSENGER CREW PROVISIONS PARTS 3. OUTSOURCING PORT SERVICES DIAGRAM |