Shippers 'happy to pay top dollar' for guaranteed price and capacity
Shippers are happy to pay more for capacity and pricing assurance, and would like to be “in the loop” with supply chain decision-making, delegates heard at this week’s World Cargo Summit in Bruges.
Jody Paulus, CEO of dangerous goods shipper Optitune, explained that as a seller, he must set prices and quantities for his clients around a year in advance of production – which creates a headache when factoring-in supply chain costs.
He told delegates” “What is very important for me is that I have to make my prices at least a year in advance, with shipment included. It’s very difficult to get some kind of price [from carriers or forwarders], yet I must deal with this in my price towards my client.
“I am not completely sure what I’m actually going to pay for a certain shipment at a certain time. The more insecurity, the less interesting it is to me.”
And Mr Paulus said he would be happy to pay top dollar for a reliable service.
“When we talk about profitability, for me, it might almost be worth it to pay a little bit more and have a guaranteed price and guaranteed availability that I can ship, rather than think it’s always the lowest possible price.”
Further, Mr Paulus said, shippers looked for a “customer-centric” supplier that would take care of unexpected changes to their supply chain.
“Treat me as a partner,” he said. “Think along with me, if you can. For instance, now I’m not only shipping to China, suddenly I’m shipping to Vietnam. That’s now two destinations, because of geopolitics and production changing. This means completely different requirements and documents.
“Who can help me with this, so that I know that my shipment really arrives? I’m looking, of course, at my partner. This is where I hope they say, ‘oh, we can do everything for you’. They can say, ‘but it will cost you a little bit more’, but at least I know that it will be done.”
Danita Waterfall-Brizzi, principal cargo and logistics consultant at Hospitio, pointed out that forwarders shouldn’t assume that their customer “knows as much as they do about moving freight”, and there was often no explanation or discussion about the options and challenges of going from A to B.
“If they actually know that we have to have ‘China plus one’, we have new ways of shipping… As a shipper, it sounds like you wouldn’t mind knowing some of those things,” she told Mr Paulus
“Not to do it on your own, but to understand the challenges, the timing, and then the pricing that’s involved.”
He agreed that “that kind of information for me would be crucial”, adding: “We all know the better the relationship you have with your client, the less likely they are to shop around for something else.
“If I have security that they are getting me there every single time, no problems, at a price I know and can accept, then I have very, very little incentive to look for something else.”
Ms Waterfall-Brizzi said freight forwarders “more than ever” had their work cut out to manage supply chains in a turbulent world and stay competitive.
“Being able to explain and work through regulations for countries, the customs needs, what paperwork, what is digitised and what’s not, would help,” she concluded.
