I love this approach by CMA to partner with their customers for mutual benefit. Shout out to Ed Aldridge and the team for creating real solutions to real problems.

The opposite of this approach is to try to solve problems with a hammer, such as blank sailings, which help no-one in the long term. Of course in the short term it helps to keep rates artificially high. In the medium term it creates chaos due to equipment imbalances, and for the carriers customers it impedes their ability to reliably serve their customers. Even without blank sailings, schedules are only 39% reliable as it is.

A better way would be for carriers to understand how customers operate their businesses, and for customers to understand what are the carriers primary cost drivers or bottle necks. This would need to be a top to top forum as most carriers have centralized decision making at their company headquarters. Fortunately there are a lot of great talents out there like Rick Gabrielson or Mark Baxa who could mediate such a forum.

When I was an importer I met with the President of a very large carrier. During our conversation, I asked him what his biggest customer driven operating expenses were. He said:

• #1 was no shows. Similar to the hotel and rental car industries, when a container is reserved (or worse repositioned) and it's a no show, it costs money. It's both an opportunity cost, and the cost of positioning the asset.


• #2 was forecasting. Customers would constantly over or under forecast, and vessel space is both fixed and highly perishable. Once it pulls out of port the empty spaces can't ever be filled.


• #3 was empty re-positioning. If we moved our cargo to the Midwest for example, it was often difficult for them to get a return load, so they had to empty reposition the equipment back to the west coast.


• #4 was the cost mentioned in this article which is referred to as dwell time. Carriers can't make money when their containers are not in motion.

The solution we came up with was to include these issues in our contract, which created a win/win. My company got incentives if we exceeded the KPI's, and they got a much more profitable client.

It's always seemed strange to me that an industry so dependent on each other often operate as though they are adversaries. The solution is to create a forum to seek understanding of the issues on both sides, and create a new dynamic for mutual benefit.