Planting the Seeds of Reliability
NYSHEX’s Hybrid of Guaranteed Ocean Shipping and Digital Contracting
Finds Fertile Ground at the Agriculture Transportation Coalition Annual Meeting.
With summer in full swing and a wide scale greening everywhere you look, I’m astounded to see what was just seeds weeks ago becoming massive plants, flowers, and vines. [Note to self: weed the maple seedlings in the yard before they take over.] A few days ago, I had an equally amazing opportunity to see the seeds of NYSHEX that were planted with export shippers a year ago coming into full bloom at the Agriculture Transportation Coalition Annual Meeting (AgTC), a gathering of over 400 agricultural and forest products shippers and logistics professionals.
It was a personal triumph for me seeing so many of our NYSHEX members with whom I’ve been working closely all year, and finally meeting the new members who have recently joined. Agricultural shippers have been true pioneers on NYSHEX since the beginning and have helped form the foundation of the exchange’s success.
And the AgTC community on the whole have got to be the some of the nicest, most down-to-earth folks anywhere. You can always count on them to roll up their sleeves and collaborate. That’s what makes this event an incomparable occasion to connect and get to the root of what’s going on in the industry and in the minds of agricultural shippers.
As an industry, they face serious challenges which were on full display at AgTC. The panels and sessions highlighted some major hurdles which need to be overcome. Here are some of my takeaways from the meeting.
- Shipping continues to grow more complex. Shippers are frustrated by the increased complexities and challenges to get their cargo moved. The sentiment most shared was that it simply should not be this difficult to move freight. One shipper mentioned during a panel discussion that there were over 130 emails sent between his team, his forwarder and the carrier to resolve one issue. For me, hearing that really validates that NYSHEX is on the right track with features like its simple space guarantee and hassle-free payment of penalties when contracts aren’t adhered to.
- Changes in trade policies loom. China’s April retaliation at the $50 billion level is 1/3 agricultural goods and it has the potential to impact roughly 2 million U.S. jobs. If China’s retaliation duties on announced commodities are imposed, they will significantly impact U.S. agriculture export volumes in 2018, and they’ll have an impact on overall U.S. GDP.
- Shippers face rising costs and unpredictable rates and fees. Carriers and shippers alike are concerned about the rising cost of fuel, higher trucking rates, ELD fees, Clean Truck fees and more. Ocean carriers’ cost of capital is 5-6% higher than returns, yet the downward trend on rates has not reversed. Many opine that the tipping point is fast approaching. All the unpredictability makes a strong case for the fixed rates and all-in pricing of NYSHEX forward contracts.
- The driver shortage is changing trucking. There has been a major paradigm shift in the industry. Shippers used to have their choice of drivers, but it has since become a seller’s market. With the deficit of truckers, exporters are competing for labor. That is compelling them to adopt tactics to appeal to truckers and become a “shipper of choice.” One shipper described how their company entices drivers with voluntary truck rate increases, employee work schedule adjustments to accommodate drivers’ schedules, and even small perks such as having snacks in the waiting room.
- There were rays of hope amidst the uncertainty and frustration. Learning about this shift toward cultivating driver relations and seeing the merits of NYSHEX solving some of the industry’s major pain points was encouraging to me. Considering all that I learned and the people I met, I’m counting this year’s AgTC meeting a huge success! It’s been a fulfilling, educational and fun journey, and I’m energized to keep applying all that I’m learning to continue to shape NYSHEX into a value-add for agricultural shippers.
I’m already looking forward to my third AgTC Annual meeting next year and seeing what fruit the seeds of NYSHEX yield in our members’ businesses.