A shipper’s perspective
Gerard Morrison, managing director of Maersk Line Oceania, says overall the new VGM requirement has been implemented smoothly in both Australia and New Zealand.
But on challenges being faced by the shipping and freight industry in general this year, he sees declining shipping rates as the big one, which have impacted heavily on revenue generation. “Compare Q2 2015 with Q2 2016 and there’s been a global drop of around 24-25 percent in freight rates. They’re at all-time low,” he says.
While that’s good news for exporters, and not-so-good news for the shipping companies, Morrison says the real challenge for everyone is whether it’s sustainable.
He says Maersk has put a lot of effort into lowering its cost base as much as possible – however, with New Zealand the difficulty factor is much higher than the rest of the world due to our geographical distance from markets and the comparatively small, often seasonal, volumes of freight shipped.
“The cost of serving New Zealand will always be extremely high compared to other countries.”
Shipping companies’ strategies are now based on making networks as efficient as possible, explains Morrison. Competition for business has become fierce, and the key to survival is to find new ways of doing things, he says. For Maersk that has meant launching new services out of New Zealand that have not been seen before. One is a northbound service out of New Zealand directly to China, with another in the opposite direction. And there is a new service to and from South America. Flexibility on capacity and connections is made possible through Maersk’s extensive global networks.
There’s also a move from paper to digitalisation and automation in regards to documentation, which also results in greater efficiency for not just shipping companies, but also freight companies and customers.
Morrison’s advice for export and import companies is to properly understand the many shipping options available. “To be educated involves a lot of talking and information gathering. So spend a lot more time in the investigation phase before making any decisions.” of honesty, or the use of unreliable equipment leads to misdeclaration, accidents or the introduction of unwanted pests and diseases.”
Wherever there are savings and efficiencies being made within New Zealand’s freight and logistics sector, you can be sure there is a technology behind it.
Infor’s enterprise software solutions, for example, which are increasingly ‘cloud’ delivered, focus heavily on integrated transport and inventory planning. If your warehouse plan changes, then the software anticipates the potential impact on other areas of your business such as inventory, labour allocation and billing.
Logistics managers can use the transport planner to analyse shipment orders based on their origin and location anywhere in the world, consolidate loads and determine dates – without having to worry about potential resource or cost constraints, explains Helen Masters.
“We’ve also placed considerable emphasis on making of this happen in real time, around the clock. So if you’ve got supplier issues in Europe, you’ll instantly be able to identify and manage the problem without ever leaving your desk in Auckland or Wellington.”
Dairy manufacturer Synlait Milk deployed Infor M3 (ERP) and Infor ION (middleware) to enable new capabilities including simplified tracing with third-party transport and packaging suppliers, and providing customers with improved visibility of the packaging process.
Infor has also allowed businesses such as freight management partnership Kotahi, to go one step further and integrate merchandising, marketing, and demand data within their solutions.
As for the local supply chain industry, Masters believes the phenomenal growth of sectors such as the high-tech manufacturing industry means it’s on a very solid footing.
“Even as recently as ten years ago, New Zealand supply chain maturity would have been well below markets such as the UK in terms of sophistication and integration. Today it would absolutely be on par or even exceeding global benchmarks.
“A good indication of this is Synlait Milk. This year at our global awards they beat some stiff competition to take out our international operations excellence award in New York. It’s not too much of a stretch to say that more New Zealand supply chain programmes will be joining them on the podium in the not-toodistant future.”