NYSHEX is a proud sponsor of the Agriculture Transportation Coalition (AgTC). Their annual meeting brings together some of the brightest shippers, carriers, and other industry stakeholders. Even though this year's event took place virtually last week, the pivotal discussions charting the course for the future of the industry were not impeded. Here are some of my top takeaways from this year's presenters.
1) There has been immense collateral damage to back-haul trades caused by head-haul blanked sailings. One exporter reported having no other option but to make double - even triple -the bookings needed because of unprecedented, last-minute booking cancellations across the board with ocean carriers. One leading ocean carrier exec corroborated this by presenting the other side of the coin: that exporter booking cancellations are currently ranging from 50% to 80%. Both parties petitioned to one another that changes to booked shipments be communicated proactively.
2) There remains much confusion surrounding when freetime starts as there is no standard among carriers today. Shippers requested that carriers align on a standard and make demurrage and detention terms enforceable provisions in ocean shipping service contracts.
3) The industry remains divided regarding grey chassis pools. One presenter illustrated that the chassis provisioning model with proprietary pools doesn't work very well, and that grey pools are efficient because they increase the access to available chassis. Another retorted that mandating grey chassis pools could have harmful long-term consequences for the supply chain.
4) A global NVOCC lamented that ocean pricing, and processes to obtain pricing, remain too cumbersome. RFQs are too complicated and lead to faulty business decisions, and bunker surcharges and formulas remain opaque. An export BCO shared that it has become difficult to obtain freight rates for more than 1-2 months into the future as carriers are hesitant to commit to pricing.
5) A renowned economist demonstrated that e-commerce is booming and that the trend in increased safety stock is here to stay as shippers have lost faith in their ability to obtain sufficient freight fluidity to avoid stockouts.
The AgTC community, even when divided, always manages to have productive and positive discussions, and this meeting was no exception. Action items were noted and a sincere willingness to work together for sustained improvement was evident.
Aggregating these debates with other webinars and online discussions I've seen across market segments, I can't help but acknowledge the deepening chasm and lack of trust between industry players right now. At NYSHEX, we know this distrust has nothing to do with the good people on either side, but it is rooted in the misalignment of expectations. As Gordon, our CEO shared at the AgTC annual meeting, NYSHEX has moved into the long-term contract space and we are proving daily that shipper-carrier relationships are enhanced by aligned expectations, clear terms, and enforceable agreements.
In fact, here is a recent interview with one of our export members speaking to how her carrier relationships blossomed as a result of using the Exchange created by shipping stakeholders for the good of the industry.
Let us help you regain trust today!