Shippers Are Tearing up the Playbook

Shippers Are Tearing up the Playbook | ATO Shipping NL

Shippers Are Tearing up the Playbook

As the international logistics system was stripped of any reputation for reliability over the past two and half years, the prevailing view has been that shippers are tearing up the playbook so to speak and will never look at their supply chains the same way again. 

Without question, there is ample evidence that shippers during the COVID-19 pandemic have been tearing up the playbook that served them effectively for years. Whether it’s chartering their own ships as companies such as Home Depot, Walmart, IKEA, Costco, Dollar General, and Target did, beefing up inventory or entering end to end logistics relationships with ocean carriers, the landscape today is starkly different from 2019.

The shift can be seen at major US ports, where a heavy buildup of inventory of goods to be sold later in the year is a key reason behind chronic vessel backlogs, but it’s part of a much broader change in mindset, and one that the logistics industry has taken note of. In fact, the logistics industry is so convinced that shippers are making real and possibly permanent changes to their supply chains that major players are aligning around that future. 

After a string of acquisitions, Maersk is well down the road toward building an integrated offering, but it is hardly alone in seeing the opportunity in addressing shippers changing supply chain needs. In essence, what is happening now is the whole ecosystem is fighting for direct access to the beneficial cargo owners. 

Sanders, managing director and senior partner in charge of global shipping at Boston Consulting Group, told the JOC TPM22 conference in early March. We have only seen the beginning as carriers want to deploy their extraordinary profits into the ecosystem in an effort to build broader capabilities. 

The reason is simple: a massive change in mindset among customers. BCOs are willing to think radically differently to secure the flow of goods, adding that key performance indicators are no longer cost decreases but reliability and predictability.

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