Rapid change in any industry creates added uncertainty as strategic planning takes on increased levels of
risk. Initiatives concerning technology require double and triple checking as the buzz word digital invades
nearly every meeting. Carrier consolidation challenges ongoing relationships that may have lasted for 20-
plus years, but are no longer valid because of changes in management and sales personnel. Supply
chain management and construction may require alteration as new alliances change routes and transit
times. Combined, these factors add to the daily pressure to deliver for customers the highest level of
service possible.

Moving into 2018, we see these same trends continuing and most likely accelerating. Buying power
consolidation in certain trades is pushing pricing downward and forcing market participants to forge new
alliances to protect their account base and their bottom line. In 2016, in the trans-Pacific eastbound trade,
the top 15 non-vessel-operating common carriers booked in one month the same as the next 85
combined. In October, the top 15 booked more than the next 110 combined. This concentration of buying
power and space procurement in our view is not beneficial to the overall market including carriers, OTI
and beneficial cargo owners.

The new year will see additional entrants into the logistics technology lottery where increasing numbers of market participants are
claiming they have the be-all, end-all digital solution. Capabilities to provide instant online quotes, track cargo, and provide the ultimate
supply chain solution on your phone screen are repeated daily. While potentially a bit old-fashioned, usage of the data and delivering
outstanding customer experiences is the real key. Our industry can certainly use improved connectivity across the supply chain. Our
crystal ball tells us that for our organization, people still make the difference.

ARO Category:
Logistics
www.OL-USA.com
ARO Issue Year:
2018
Source URL: https://www.joc.com/aro/alan-baer-president-ol-usa