2012-11-13 editing 3rd iberoamerican syposium of marine insurance dh

8/11/2019 2012-11-13 Editing 3rd Iberoamerican Syposium of Marine Insurance DH

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OUTLINE

2

IntroductionThe Causes of Supply Chain Disruptions

The Vulnerabilities in Maritime Transport Chains

The Impacts of Supply Chain Disruptions

Chinese Shippers’ Perceptions for Maritime Related SCDs

Mitigation Strategies for Supply Chain Disruptions

China’s Logistics Industry

uantifying Supply Chain Disruptions Costs

Conclusions



The Causes of Supply Chain Disruptions

3

Supply chains !SCs" are comple# systems of net$or%s&lobal SCs could be further subdi'ided into three layers( o'ersight layer)

transaction layer and logistics layer !*illis and +rti,) -../"



The Causes of Supply Chain Disruptions

4



The Vulnerabilities in Maritime Transport Chains

5

Sources of Maritime Transportation Related SCDs



The Impacts of Supply Chain Disruptions

6

The cost impact $ould be bet$een 0SD 12. million and 0SD 13..

million for each day a supply net$or% is disrupted4

Shareholder 'alue $ould decrease by 3.5-674 The a'erage abnormalstoc% returns of the firms sampled $as about 8/.7 o'er a time periodthat begins one year before and e#tends to t$o years after the

disruption announcement date49 port closure could cause a loss ranging from millions to trillions ofdollars for shippers) carriers) and consignees) and e'en damage anation’s economy4

Schedule unreliability in liner shipping operations affects se'eralactors $ithin the maritime transport chain(

The threat of piracy is multifaceted4

The conse:uences of terrorist attac%s on maritime transport chain

systems include human) economic) and intangible conse:uences5



Chinese Shippers& 'er!eptions for %aritimeRelated SCDs

7

Sur'ey Screen




8

Sample Description

Chinese Respondents Shen*hen Shanghai

Sample Si*e /; -2

Importers-;7 /67

+,porters<37 2-7




10

Chinese shippers’ contingency plans for maritime related SCDsDetail of !ontingen!y plans Sum !7"

-perational le#el

Change shipping schedule>route ?253/

Communication to all parties to reschedule deli'ery time -65?69lternati'e sourcing>substitute product 3<52<

Aegotiate price discount>rebate to customers>apply penalty to suppliers 6533

Strategi! le#el

Lengthen estimated lead time 35?2Increase safety stoc% 35?2

Di'ersify carriers>suppliers base 3.563

Build ris% management team 3?523

In'est on IT system impro'e trac%ing>de'elop ne$ product



Mitigation Strategies for SCDs

11

Getting it Right from the Start

•Proacti'e strategy !eg5 selecting safe locations) robust suppliers"

$uilding a Se!ure and .le,ible Company Culture

Collaboration

•Collaborati'e Transportation Management !CTM"

$uilding Redundan!ies

•9 short=term SCD and In'entory carrying>managing costs are lo$

oEolding safety stoc%

oStrategic stoc%•9 longer period of time SCD) and in'entory managing costs>theris%s of product obsolescence are high

oRedundant capacities

oFeeping a redundant IT system



Mitigation Strategies for SCDs

12

!Continuing"$uilding .le,ibilities

•Standardi,ation

•Postponement

•9 fle#ible supply base strategy

•Gle#ible transportation strategy

•Dynamic pricing>promotion>substitutable products strategies

!Dell successfully na'igated a SCD caused by the 3;;; Tai$an earth:ua%e by steering its

customers to buy particular products"




13

China&s ogisti!s Industry atest De#elopment•9n a'erage annual gro$th rate of -?74

•In -.33) China’s e#ternal logistic cost totalled RMB65/ trillion)

accounting for 3<567 of the &DP4

•The structure of China logistics costs (




14

China ogisti!s Infrastru!ture De#elopment

• Road transport

o9ccounting for <@527 of the total freight carried internally in -..;4

o

To$ns $ith high$ays account for ;;5-/7 of all to$ns) and ;-56@7of total 'illages country$ide ha'e access to high$ays5

• Rail transport

oRail freight only accounts for 335;7 of the total freight shipped4

oThe third largest rail net$or% in the $orld $ith ;;)...%m of trac%4

o9 proHect is under$ay to connect containeri,ed bo# shipments from

China to urope 'ia rail5




15

!Continuing"• Inland waterway

o9ccounts for 33527 of the total freight in -..;4

oChina’s 33.)... %m of na'igable distances pro'ides the $orld’s

largest inland $ater$ay net$or%4

o Ae$ Jangt,e Ri'er Port utilisation ma%es it an economically and

en'ironmentally sound alternati'e to road haulage5

• Maritime

oBy the end of -..6) there $ere /3? ports in China) ?@ of $hich

ha'e an annual handling capacity of or abo'e3. million tons4

oThe port of Shanghai became the largest container port in the

$orld in terms of its throughput in -.3.5




16

!Continuing"• Air freight

o9ccounts for only a small proportion of China’s freight

transport mi#4

oChina has 2.- airports of $hich 667 ha'e pa'ed run$ays5

•China’s forwarding, brokerage and warehousing services

oIncreasing $arehouse efficiencies and capacities in China are

strongly needed4

oLo$ efficiency of $arehousing operations is a maHor

$ea%ness in Chinese SC systems5




17

China ogisti!s Industry Challenges•Lo$ efficiency and higher logistics costs4

•Lac% of national integrated transportation net$or%4

•Poor IT infrastructure and inability to use ad'ance technology4

•0nderde'eloped $arehousing ser'ice4

•Local protectionism4

•9 scarcity of :ualified logistics personnel4

•Inconsistency in policies and regulations4 and

•Gragmented domestic freight5




18

Eigh$ays became par%ing lots in -.3- China’s national dayholidays




19

R%$/01/ billion sales and more than 23 million pa!kages on //4//453/56 7single day8




20

Re!ommendations for Colombian Importers•Choose robust suppliers4

•Choose robust ?PLs in China4

!better $ith lobbying and bargaining po$er $ith local go'ernment)eg5 G+KC+AA5 &uan#i is indispensable in China"

•9d'anced $arning strategies4

!lengthen lead=time) particularly) Labour day) Aational day) festi'als) etc5

+r bring for$ard to a'oid the Chinese festi'als"

•nhance information 'isibility4 and

•nhance collaboration $ith SC parties5




21

Methodology

•The Latent Class Models !LCM"= a probabilistic modelling

•Seemingly 0nrelated Regression Models !S0R"

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X1 X2 X3 Xn X1 X2 X3 Xn…

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22

.indings•The LCMs re'ealed that respondents’ latent preference heterogeneity

created t$o segments !lo$ and high" under normal operation and three

segments !lo$) medium) and high" $ith a disruption 5




23

!Continuing"

•Shippers’ *TP are different under normal and disruption operations4•Shippers’ VTTS could increase more than / times if there is a disruption5




24

!Continuing"

•The S0R model results re'eal that production) company>supply chaincharacteristics) and shipment specific characteristics ha'e significantinfluence on shippers’ preference for maritime ser'ice attributes $ith and$ithout a disruption5

oGor e#ample( geographical locations




25

!Continuing"

oGor e#ample( geographical locations

iq i Shenzhen iq Sydney iq k k k U Shenzhen Sydney xα β β β = + + + ∑



Conclusions

The findings !ould be helpful for industry stakeholders(•Shippers

•Ser'ice pro'iders

•Insurers

•&o'ernments and policy ma%ers

2012-11-13 editing 3rd iberoamerican syposium of marine insurance dh

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