Container shipping has become a commodity,where customers require low prices and high on-time delivery, but are getting neither.

Customer requirements: What they get:

3. Short Transit times4. Personal relationships5. Easy documentation6. Large port coverage7. Credit8. Accessible customer service9. Electronic Data Interchage (EDI)10. Tracking of containers11. Adaptability to local conditions

Low utilizationHigh unit cost

The best carrierdelivers 60% on time

High prices

1. Low prices2. On-time delivery

Today’s liner networks are no longer adequate

Direct stringThis network design was invented TO:• leverage large vessels to reduce unit cost• maximize coverage with few vessels

Hub & SpokeThis network design was invented WHEN:• carriers had few strings• terminal capacity was abundant.

• Today’s carriers have many strings and therefore a very complex system.

• Port congestion only amplifies the problem

Today’s liner network: Direct String

The complexity leads to lower performance on the most important criteria

The complexity leads to lower performance on the most important criteria

Today’s liner network: Hub&Spoke

Point-to-point services have higher vesselcost… but the savedcost of complexity outweighs this disadvantage

The commercial standards drive the same problems as the network

Today’s commercial standards

The airline model turns the problems into significant benefits

Once the commercial benefits are added, the smaller vessels become very competitive

These principles favor the small forwarders

Thank you for your time