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Raising the bar for global standards in container shipping industry

by Ken Bloom

Mr. Ken Bloom joined INTTRA as CEO in April 2001. Previously, he was COO of Optimum Logistics, a subsidiary of Stolt-Nielsen, responsible for the development and marketing of Translink, a Web-enabled system that provides advanced supply chain management. Prior to Optimum Logistics, Ken held a variety of management positions at Stolt-Nielsen including assignments in ship management, logistics, and business systems. Ken earned a BSc in Mathematics from the University of Chicago and a MSc in Operations Research from Stanford University.

In 1956, ocean-borne containerization was introduced with the shipment of a Sea-Land container aboard the Ideal-X from Port Newark, New Jersey to Houston, Texas. The first US intercoastal service followed a few years later, and within a decade transatlantic shipping connected Europe to the West. Fully containerized services between the US and Japan were launched by the late '60s, followed by services to Hong Kong, Taiwan, Jamaica, Barcelona, Marseilles, Genoa, Naples, Korea and other ports. Over the course of the decades to follow, the Middle East, Australia, and South America joined the global face of containerized shipping.

For the past 45 years, global container shipping has been a proud and prosperous industry, serving as the lifeblood that has connected businesses and trade around the world. Today's shipping industry, however, is a highly fragmented, complex, paper-intensive process that is filled with inefficiencies. Customer interaction with carriers is typically a manual process and logistics execution data is generally not integrated with enterprise systems. For example, today less than 1% of all shipping customers use EDI directly with ocean carriers. The overwhelming method of information exchange is via fax or phone. Economic inefficiencies across the industry are enormous, and by some estimates currently exceed US$5 billion annually.

Under normal economic and political circumstances, one may expect that recently implemented economic stimuli would provide the necessary level of liquidity to lift us out of the current economic downturn by the second half of 2002. However, the tragedy of September 11 and the uncertainty of war and terrorism render predictions little more then guesswork. There is no doubt that in the face of a slow growing global trade, astute business leaders in the container shipping industry will focus on reassessing current industry practices in an effort to cut costs and increase profitability. Carriers unable to streamline processes and transactions across the supply chain will be saddled with high overhead costs from low value-added activities.

For shippers, today's sluggish economy has made efficiency and visibility increasingly important. In addition, shippers will need to achieve efficiencies quickly and with minimal capital expenditures. Finally, shippers face the difficult task of meeting contract volumes to preserve their contract rates.

Industry-wide inefficiencies in our current economic climate underscore the need for an industry-wide solution. Driving efficiencies into the ocean transportation industry, and driving costs out, requires a common understanding of the challenges, cross-company business processes, and the standardization needed to synchronize transactions and the flow of information. Streamlining and standardizing traditionally inefficient processes can only be achieved through a shared industry-wide vision coupled with a broad-based commitment on the part of leading carriers, shippers, and freight forwarders to collaborate in the development and implementation of a solution.

INTTRA [www.inttra.com], the leading provider of B2B ocean freight services, is doing its part to eliminate inefficiencies in the global container shipping industry. The neutral, Web-based portal is backed by the world's leading carriers, freight forwarders, and logistics providers and enables the infrastructure and industry-wide improvements that are needed to create economic improvement for all supply chain participants in the global container shipping industry.