Transcript Shippers Association Proposition

NCBFAA Shippers Association
2015 NCBFAA Annual Conference
Emergence of Shippers Associations
• Shipping Act of 1984
• Ocean Shipping Reform Act
Shipping Methods
• NVOCC direct contract with carrier
• Co-Load with potential competitors
• Shippers Associations
Operational Guidelines
• Shippers associations are required to be not-for-profit.
• Shippers associations are not immune from antitrust laws.
• Management of an association must be independent of the
members.
• OTI License and Bond required for inclusion in contracts.
ASSOCIATION FORMATION
Established
Working
Relationship
Realistic
Expectations
Sponsors
CREDIBILITY
ASSOCIATION
SUCCESS
Members
Support
Barriers to Success
• Potential members try to negotiate with the association.
• Protectionist issues - refusal to share information with
Association management.
• Potential members think they are too big or too small.
• Unskilled management company.
• Members that do not report shipments “fairly”.
• Benchmarking Rates.
Core Competence Of Management Co.
• Improve international market reach.
• Control carrier bid/bullet rate process.
• Provide leverage for rates.
• Supplement member’s staff.
• Provide framework for rate and assessorial updates.
Association Benefits

Rate reductions – Market intelligence.

Multiple carrier weekly sailings.

Multiple options during critical peak sailings.

Improved visibility with the steamship lines.

Customer service at higher levels.

Access to multiple contracts with no exposure.

Quick reaction to accessorial changes.

Member is shipper of record for the carrier.

Members control the Association.

Refund of excess revenue.
Individual Savings Vary
• Location.
• Willingness to “think outside of the box”.
• How well members and their agents know their
markets.
• How well members can project their requirements.
• How often we file member’s rate requests…that
result in moving cargo.
NCBFAA Shippers Association formed.
Worldwide Logistics retained as management company.
Smaller NVO’s all in. Larger NVO’s support specific contracts.
Assist members in confronting deregulation.
1999
Rates go online through new partner CargoSphere
LCL and LTL added to offerings
1999
2002
2004
Improve operations and communications
Improve CargoSphere interaction and contract visibility
Fine tune carriers and markets
1999
2002
2004
2005
2014
Major system updates 3Q that will improve response and presentation of our
member’s shipping and billing
1999
2002
2004
2005
2014
2015
Why did we choose CargoSphere as a partner?
• Specialized supplier of technology for management of buy-side contracts and
rates and sell side rates and quotations.
• CargoSphere is specialized just on needs of freight forwarders and NVOCC’s
- regional and global.
• One of world’s leading providers with over 3,000 users in 46 countries.
• Founded in 1999 and serving the NCBFAA-SA since 2002.
• We have grown with CargoSphere
Why use CargoSphere and what is its value?
• We enter our rates into CargoSphere and use CargoSphere to manage our
contracts.
• We use the CargoSphere Rate Mesh to ‘share’ them with all members that
have a CargoSphere system.
• The CargoSphere system is better than spreadsheet delivery
• always current
• always available
• searchable and filterable
• can be automatically used in quotes on CargoSphere quoting system
Do you have to use CargoSphere?
• No, we can give you rates in spreadsheet form.
• Most members now use CargoSphere.
• CargoSphere has over 3,000 active users
• Over 6,000 contracts managed
• Reduces the time and increases the accuracy of quotes back to our members
• Reduces manpower required.
• CargoSphere has a special commercial offer for our shipper association
members. Go to their booth to learn more.
NCBFAASA 1999-2001
US IMPORT
US EXPORT
NCBFAASA 2001-2005
US IMPORT
US EXPORT
NCBFAASA 2005-2010
US IMPORT
US EXPORT
NCBFAASA 2010-2015
US IMPORT
US EXPORT
NCBFAASA CARRIER COVERAGE
MAERSK
CCNI
NCBFAASA CARRIER COVERAGE
MAERSK
CCNI
YML
NCBFAASA CARRIER COVERAGE
MAERSK
YML
CCNI
HANJIN
NCBFAASA CARRIER COVERAGE
MAERSK
YML
CCNI
HANJIN
OOCL
NCBFAASA CARRIER COVERAGE
MAERSK
YML
OOCL
CCNI
HANJIN
NYK
NCBFAASA CARRIER COVERAGE
MAERSK
YML
OOCL
CCNI
HANJIN
NYK
MARFRET
NCBFAASA CARRIER COVERAGE
MAERSK
YML
OOCL
MARFRET
CCNI
HANJIN
NYK
COSCO
NCBFAASA CARRIER COVERAGE
MAERSK
YML
OOCL
MARFRET
CCNI
HANJIN
NYK
COSCO
ZIM
NCBFAASA CARRIER COVERAGE
MAERSK
YML
OOCL
MARFRET
ZIM
CCNI
HANJIN
NYK
COSCO
SEALAND
NCBFAASA EXPORTS
SOURCE: BROOKINGS INSTITUTE
FCL ACTIVITY
4,276
3,834
3,976
4,038
3,943
3,366
2009
2010
2011
2012
2013
2014
MEMBERSHIP
102
99
105
97
100
102
103
82
2007
2008
2009
2010
2011
2012
2013
2014
TEU PERCENTAGE SHIPPED BY MEMBER
.
Chart illustrates that SA not dependent on large members for survival. Smaller
companies are taking advantage of SA as NCBFAA envisioned in 1999.
3%
25%
39%
1 to 9
10 to 50
51 to 200
33%
201 +
GLOBAL MARKET – MEMBER PERSPECTIVE

Frustration over unstable rates – monthly GRI’s.

Constant increases squeezing member profits and straining customer
relationships.

Congestion = lost business.

Carrier service levels are in a downward spiral.

Equipment availability.

Sufficient chassis.

Decline in Door Rates (SD) versus CY rates.

Lift capacity.

Terminal congestion.

Customer Service.
CUSTOMER SERVICE SUPPORT
NCBFAASA fields an average of 200 emails per day.
60% rate issues.
Rate requests.
Rate lookup in CargoSphere and SA contracts.
30% problem solving.
Rating errors.
Space issues.
Securing equipment.
10% service information.
Routing look up.
Transit time.
Carrier announcements.
MAINTENENCE

NCBFAASA signed 575 contract amendments during 2014.

Constant Monitoring of carrier contracts for updated GRI’s
and surcharges.

Continuous updating of rate sheets.

Continuous updating of CargoSphere.

Carriers require updated OTI - Bond and notification on
expired or revoked bonds.
PARTNER PROGRAMS

LCL Partner - Carotrans

LTL Partner - Landstar

Online Rates - CargoSphere
KEEPING IT COST EFFECTIVE
 Container fees have not increased since NCB was
introduced in 1999.
 Membership dues – tiered $$$ levels based on
employees.
 NCB operates on very thin margins
 Balancing of providing quality customer service vs
controlling rate shopping
 Any NEW first year member can join for 1 year for $100
WHAT DO WE DO

Keep Shipping simple.

Use NCBFAASA contacts to resolve carrier issues.

Provide Alternative pricing to your existing portfolio of carrier
contracts.
WHY MEMBERS USE NCBFAASA
 Provide customer service that is lacking from the steamship
lines.
 Help members avoid the aggravation of contract maintenance.
 Access to competitive rates without signing your own contract.
 Ability to access online rates via CargoSphere.
 Low cost to use NCBFAASA contracts.
 Market information.
Q&A FOR YOUR
SHIPPERS
ASSOCIATION