Kicking old habits with logistics innovation

Kicking old habits with logistics innovation    Now that the clouds of economic doom and gloom are showing signs of lifting, the liner shipping industry ' carriers, shippers and third-party logistics providers included ' have the opportunity to shift from survival mode to driving innovation and true competition into the business.
   Numerous firms, including some of the biggest in the world, spent the past two years suspending services, withholding investments and eliminating staff simply to keep their heads above water. Incredibly, most of the major players involved with international freight transportation lived through the onslaught largely intact.
   While freight volumes are increasing modestly with the gradual return of consumer confidence, there is now enough activity in the pipeline to sustain existing transport capacity, earn some profits, and make some overdue efficiency-based investments.
   As Associate Editor Eric Kulisch reports in this issue of American Shipper, (pages 12-17) supply chain managers are tasked more than ever with meeting shifting customer demands, namely the balance between buying online versus shopping in stores. Opportunities for shippers to think outside the traditional logistics services box are abundant, and with advances in technologies are now more possible than ever. In this month's cover story (pages 6-11), Associate Editor Eric Johnson analyzes the viability of e-procurement, and how various transport modes are becoming less resistant to its use.
   Carriers and 3PLs should make every effort possible to work collaboratively with shippers to make supply chains competitive tools rather than operating them as simply a means to an end.
   Yet the risk factors for complacency are ever present in this industry.
   For instance, London-based Drewry Shipping Consultants warned in mid-January that the liner carriers appear to have returned to 'normal operating conditions' in 2011, meaning they have refocused on market share and away from individual profitability. Many shippers and 3PLs may be lured back to chasing services based on the cheapest price as proof of their corporate worthiness, instead of paying compensatory rates for transportation that fosters more responsive and innovative logistics practices. If indeed this unfortunate scenario plays out this year, the shipping industry will only prove to the world's consumers that old habits die hard.