Living in Interesting Times

There is a Chinese proverb that says: "May you live in interesting times"

Most westerners view this as a compliment or at least a positive alternative to boredom.  Unfortunately, it is actually a curse. Our global business environment today I think defines "interesting" in many ways.

The transportation and logistics business has been a hard way to make a living in the last few years.  In 2008 alone, our industry has been changed fundamentally. The competitive landscape in every mode of transport is very different from that 12 months ago! With rates and fuel surcharges climbing through the roof, shippers are looking to extend contracts and take the measure of the market on how fuel escalates. Virtually everybody is searching for stability that they can bank.  Lets face it:  It is pretty hard to move freight at all these these days.

Making the most of business relationships between customers, carriers and other service providers today takes more collaboration than ever.   The word "partnership" I think is overused.   Shippers want the lowest rate possible combined with the best service available.  That's called VALUE. There are still shippers out there, especially some big ones, who think a WIN-WIN relationship means they win twice.  Shippers who think that in the future will find themselves up a creek without a paddle. 

Shippers, carriers, integrators and intermediaries like forwarders and brokers are going to have to collaborate.  Further, they are going to have to understand tactics that extend beyond their core transport competencies into supply chain logistics.  Hybrid solutions will be the soup de jour.  To my mind, the relationships needed between shippers and carriers include the following.

Logistics Sales professionals will be challenged more than ever before to know their complete span of products and how they can be used by customers.  Further, they must know themselves well enough to know when to bring in product experts to help teach customers how and when to use specific services.

Logistics sales pros will also have to be secure in their own relationships well enough to know when to counsel customers to choose another product or service.   Logistics is a complex business these days.  Educating customers and their staffs is a key support and relationship role for Logistics and Supply chain sales professionals. 

Coopetition will become reality.  Integrators in particular are going to have to learn to work with other transportation parties to create blended solutions.   

Logistics Sales people will need to work with their customer contacts to understand who the internal customers are of the transportation team they usually call on.   Supply chain is not a core competency for most sourcing professionals.  They rely on corporate transportation and logistics colleagues.  Having said that, international trade compliance staffs now have a large role in carrier selection based on ease of compliance with government regulations and carrier ability to support new federal rules. Understanding how to deal with everything from the Automated Export System (AES) and ITN numbers to Remote Location Filing will be SOP going forward for transportation sales professionals.

More than anything though,  I believe character is key as a part of today's business relationships.  I define character as what you do when no one else is looking.   When times are very tough are situational ethics in play?   Did you do the right thing?    It's a core concept to teach children, but it can be a very gutsy thing to do when the business bottom line is challenged.   

" Knowing your product as an expert, acting as an advocate of your customer to your own company and then combining that with the character to do what's right will carry you through any and all market economics." 

At the end of the day, all you have is your reputation. 

Eric

Add Freightdawg.com to your social bookmarks!

Comments

[Paul Gooch, The Logical Group]

Eric, another good post from you. We have been beating the collaboration drum for several years, working with the European Petrochemical Association Supply Chain Think Tank. You may be interested in taking a look at the most recent publication which is a joint effort between EPCA and Insead: Supply Chain Collaboration and Competition in and between Europe's Chemical Clusters. I have a PDF of the document. Paul