March 1, 2010

Long Beach March 1, 2010

10th Anniversary TPM

Bill Rooney: President, Hanjin Shipping America

“Shipper – Carrier Dialog”

March 1, 2010

“Now is the winter of our discontent

Made glorious summer by this sun of….

rebalanced supply and demand”

•Play: Richard III - Act 1, Scene 1

•Lead Character: Richard, Duke of Gloucester

Some famous dialog to kick things off:

March 1, 2010

Is this what you feel like during the annual contract dialog?

March 1, 2010

Which is the Shipper and Which is the Carrier?

March 1, 2010

Shippers have many choices among carriers

Shippers are the customers and to succeed carriers must meet their needs

The carrier industry is capital intensive, high fixed cost, cyclical & holds no inventory

Truths that underlie service contract dialog

Energy costs play an unpredictable & critical role

There is “value” being left on the table

March 1, 2010

We’re all in this to get the most for our companies

Truths that underlie service contract dialog

Many shippers want to ship peak volumes from the same ports at the same time

Carriers & shippers are subject to the laws of business & economics

Carriers provide good service at fair rates & are an indispensible part of supply chains

March 1, 2010

Focus on “value” rather than the lowest rate

Look beyond simple rate/volume agreements

Explore service guarantees with penalties

Use premiums & discounts for varying levels of capacity, service and performance

Ideas to improve service contract dialog:

Place a $ value on consistency & predictability

March 1, 2010

Bonuses for accurate forecasting

Greater use of score cards

Longer contract duration

Booking no-show penalties

Indexed rates

Ideas to improve service contract dialog:

March 1, 2010

Long Beach March 1, 2010

10th Anniversary TPM

Bill Rooney: President, Hanjin Shipping America

“Shipper – Carrier Dialog”