How to take the risk out of international container logistics?

 
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Byline: Florian Frese

Who is reliable enough to trust with my assets? This was the main question of people after my keynote about "How to take the risk out of container logistics" at the Intermodal Europe in Hamburg. Trust is basically the most important ingredient when doing business with a partner: Will they return my containers on time? Do I have to follow up on my invoices? Can I easily reach my partner when I have questions? Without a certain level of trust, you would probably not make deals with a company, even though the offered price seems cheap. Over the last decades we have built long lasting relationships with partners where trust was not an issue, but now two things have changed: (1) Digital technologies allow us to collaborate with basically the entire world in no time and (2) stakeholders are increasingly asking for transparency e.g. to better understand where the products they purchase come from.

To adapt to these changes, we have to redefine "trust" and find answers for how to make time-efficient and risk-free eals with partners you have never worked with before.

Trust is an everyday problem in logistics

The lack of trust is an everyday problem for most container owners and users with high impact on decisions they make. Let me give you a few examples: Imagine a container lessee returns your equipment too late or in bad condition. Of course, you might receive per diem fees to compensate you and the DPP (Damage protection plan) covers damages but how do you explain that to your next customer who is waiting for these boxes? How much time does it cost you to follow up, arrange container inspections and send emails back and forth? Imagine if you bought a used car and the condition was completely different to what the seller had told you before, you would probably not work with the same seller again in the future (and I bet you would also advise your friends against buying his/ her cars). What happens is that operational costs increase due to the lack of trust, Maersk, for example, announced random container inspections because of misdeclaration of cargo.

Increasing costs and high risk ultimately leads to somethigeveryone probably has already said at least once: We only work with people we know!

What is currently being done to mitigate risk?

Most of the time decisions are made based on gut feeling or anecdotal evidence from your network, the press, Google or sometimes just a random Linkedin post about a specific company. In...

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