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When the [Olive] Branch Gets a Little Close for Comfort, It’s Good to Have a Clear Set of Rules

Rules are often seen as a bad thing. They establish expectations and scope of responsibility and can sometimes feel like a wet blanket. If you challenge yourself however, I bet you can think back to many instances in which you were elated to have a set of rules. Perhaps the movers damaged your great-grandmother’s antique buffet or left you with a busted bed frame. You got the run-around and had to remind them of specific insurance policy verbiage in order to be made whole.

My mind goes back to when a tree limb towering over my condo building punctured my roof while I was traveling. (This stuff only seems to happen to me!) Inevitably a thunderstorm came, soaking the sheet-rock, carpet and all my clothes. The owner of the building with whom I had a great relationship was apologetic but refused to make the interior repairs. Then, there it was! On page 286 of my building bylaws, I found that landscaping was the expressed responsibility of the building owner, and any negligence was on their dime. Once that was demonstrated, the owner agreed to tap into their insurance policy, the repairs were completed, and I lived harmoniously in that home for another three years without incident. It wasn’t emotional; it was business and those were our mutually agreed upon rules. I learned that day that having a set of clear expectations documented takes the emotion out of a potentially confrontational situation and protects relationships.

Why Maersk Spot is Good for Shippers and Carriers, as well as NYSHEX

This week some really exciting news came out in the industry.  Maersk announced that they are launching “Maersk Spot” which will offer shippers guaranteed equipment and space in exchange for a penalty if they don’t show up with promised cargo.

Shipping Doesn't Have to Be Groundhog Day

Have you ever seen that Bill Murray movie, "Groundhog Day?"  It's the one where the cynical TV weatherman finds himself reliving the same day over and over again.  He tries with all his might to make it work to his benefit but ultimately accepts that things are never going to change.  Well, that used to be my day job! 

Peak 2019: The Writing is Already on the Wall

When we started to plan for last year's TPEB peak season, all the signs of the makings of a tumultuous peak were written clearly on the wall. Now as we look at 2019, not much has changed.

  • First, in 2018 threats of increased trade tariffs were looming.  Yep, that’s still definitely the case in 2019.
  • Second, we saw no announced efforts to combat the worsening schedule reliability trends including late departures and blanked sailings.  With 35 blanked sailings having already been announced in 2019 and more vessels being laid up in Q3-Q4 for scrubber installation, we can confidently brace ourselves for the worst of the worst.
  • Third, last year shippers thought they knew what shipping in peak season would cost but all bets were off once peak arrived. Many shippers ended up paying over $1000 in Peak Season Surcharges (only for the front-loaded cargo to sit in a warehouse for months). For 2019, many shippers have agreed to capped Peak Season Surcharges.  However, as accurately pointed out in a recent JOC article, “carriers will fill limited slots with containers that pay a PSS before containers that don’t.” Ocean Carriers have also been vocal that they will, out of necessity, pass on 100% of the fuel/IMO 2020 costs, therefore the vast majority of contracts now include floating bunker. The fact is, the jury is still out in 2019 as to what impact all of this will have on ocean freight over the coming six months.

At least we're in international logistics because we love a challenge! And, even in the midst of last year’s turmoil there were still winners in the race.  Making your direct service contracts as ironclad and robust as possible; that’s table stakes.  There were two key things that last year's peak winners did:

Finance execs: Do you realize this happens within your supply chain?

I joined NYSHEX about two years ago and this is my first experience within the shipping industry. Accurate forecasting, precise financial planning and keeping costs low are all incredibly critical aspects of my role and what keep all finance and accounting executives up at night. I've been completely shocked by the opacity inherent and unique to shipping freight procurement. This post is intended to share some of the key learnings I’ve obtained since joining the industry and how such learnings could be utilized by the accounting or finance decision-maker of a company shipping containerized ocean freight.