Never before has the relationship between shippers and their carrier partners been as important as now.While it used to be true that having a large volume of freight was all that was required to make a shipper desirable to carriers, thanks to the ongoing global uncertainty, that’s no longer the case.According to Kennith Sine, head of global procurement at online retailer Wayfair, while large volumes of freight will always be attractive to carriers, it is no longer enough. Shippers on the other hand need to get better access to capacity and reasonable freight rates, both essential to maintaining reliable supply chains.He says shippers need to embrace a mutual gain philosophy, with both parties committing to being 100% transparent.“If one thinks about the traditional relationship between a shipper and a carrier, it starts when procurement needs to be done, but many of these procurement processes are where the problems start.”Donald Davis, senior sales and customer care leader at New York Shipping Exchange (NYSHEX), agrees, saying too much emphasis is placed on winning business based on price, resulting in shippers changing carriers as and when contracts expire instead of building long-term relationships based on the real needs of the shipper.Participating in a recent online conference, both Sine and Davis said that far more could be achieved by starting the process with conversations instead.“The way we are doing it at present simply means someone wins and someone loses and that does not make for a good relationship that is scalable or even sustainable. Many of the ways that we go about this at present are incomplete. We would be able to achieve far more if shippers did their homework prior to engaging the carrier, highlighting what requirements would best suit their needs and then inviting those carriers that meet those requirements to sit down to a candid conversation about how to achieve this,” says Davis.For Sine it is all about striking a balance. “It is about getting a fair price – not necessarily the lowest price – as well as a valued service. It has to be solution-based options that meet the needs of the shipper d irec tly.”By building a solid relationship between shippers and their carriers one is able to see around the corner, explains Davis. “This means one can anticipate where the business is heading, identify problems, and take fast, sound decisions. It also allows for the opportunity to improve.”He advises shippers to give their carriers a clear signal that they are looking for a partnership rather than just a vessel to carry their goods at the cheapest rate possible. “What are the value drivers of the carrier you use? It is important that a shipper understands that. Ocean carriers offer a variety of services, and if they fit your organisation, then explore how you can fit into those types of services or products. Demonstrate you have an interest and then create opportunities to ensure stakeholders in both companies are in contact with each other regularly.”He says becoming a shipper of choice is all about relationships. “This means it cannot be one person deep, but requires a team effort on the side of the shipper and the carrier. The relationship needs to be supportive and transparent. It is a process that starts very early – long before the container is loaded onto the vessel.”Sine says it is just as important for shippers to ensure the carrier understands their business. Relationships still matter in shipping. They are, however, two-sided and both parties need to benefit.
