To know the true value of a logistics provider, go to the folks who are paying the bills. Find out what the customers think. That way you’ll get straight talk without hype or spin.

So that’s what we’ve done at World Trade as we launch the first installment of an exciting new editorial service feature, the Performance Partners Awards of Excellence.

Working with our BNP Media corporate partners, Clear Seas Research, we have surveyed our readers who are customers of the transportation and logistics companies that move their freight and manage their supply chains. We wanted to learn what they think is important, what they’re looking for in a service provider and how they rate their own vendors on these metrics.

As you can well imagine, to do this within the parameters of professional research is no simple feat. Lots of competitions presume to capture the voice of the people; fewer actually do so. That’s why we set the bar high for Performance Partners. We want to celebrate companies that are providing superior value based on statistically significant measures. 

First, a bit about how we came up with the name Performance Partners.

It has been clear for the past few years that the nature of logistics is undergoing a major transformation. As shippers strive to get non-productive assets off their books and optimize the returns on their assets, they are outsourcing processes they used to manage in-house that don’t constitute their core competencies. Which typically includes transportation (and even supply chain management). But to do this is to take a huge leap of faith. Entrusting your lifeblood to an outside party requires more trust in the relationship than would be the case with a mere cost-based transaction. It means sharing strategies, information, product development planning—to say nothing of expecting on-time deliveries.

What we’ve come to appreciate at World Trade as we report the on-going evolution of the supply chain is that companies are looking for Partners when they shop for transportation providers.

To some this may sound like cliché, ‘partner’ is right up there with ‘passion’ as a term so over-worked that it has lost much of its meaning. But in this case, the word means exactly what it says. A company from whom one is not simply purchasing a product but rather entering into a close relationship of mutual dependence and reliance is a vital partner. In order for either to succeed, both must.

So, in recognition of this sea change as logistics providers cross over from mere vendors to valued allies, we are calling these winners of our readers praise Performance Partners.

In keeping with the ‘sea change’ metaphor, we’re launching Performance Partners with ocean carriers. No service is more fundamental to world trade than ocean carriage. It is the foundation upon which global commerce resides. And although oceans costs have risen in the past few years, they remain the lowest in comparison to other modes of transportation. But, as shippers appreciate, the trade-off for low price is longer transport time (Hong Kong to LA is typically a 10-day run, Hong Kong to New York via the Panama Canal can take 31 days). With supply chains poised for ever-faster throughput and more agile market response, slow-moving ocean freight can pose a problem.

Correspondingly, the ocean transport sector whose service was largely a commodity differentiated (if at all) only by price, is expanding its role with a more full-service spectrum of offerings. Most major ocean carriers have added—to traditional ocean freight—such value-adds as freight consolidation, warehousing, inland waterway, truck and rail service for door-to-door service.

As they enter into this service realm, differences between carriers becomes more evident—and the praise of the customer a compelling recommendation (or, in its absence, rejection). The transition of ocean carriers from a ‘basic’ service to a ‘supply chain collaborator’ aptly exemplifies our concept of Performance Partner.

Thus, our decision to begin this first edition of what we anticipate will become one of the most prestigious awards in the supply chain and logistic sector with ocean carriers.

Before we get into a discussion of the winners, a few words about how they were chosen.

The goal of the study conducted by Clear Seas Research was to provide a superior source of comparative information for those needing global ocean transport. It is this global capability that is the key element in World Trade Performance Partners; their capacity to provide service wherever in the world customers require. We anticipate Performance Partners will soon be acknowledged as the standard in customer-feedback appraisals of international and domestic logistics providers, with its emphasis on global capabilities in keeping with the extended supply chain.

The surveys were conducted in the following way.

Initial contact was made with 19,369 readers who ship product via ocean carriers. We asked them to rank the importance of 14 different attributes in determining how they choose their carriers and also evaluate their satisfaction with their carriers on those attributes. In developing the attributes, our specific focus was to think specifically in terms of GLOBAL attributes—in other words, we wanted to make sure our survey participants were thinking about the global perspective of how their partners perform.  

Among those attributes were:

•            Port-to Port On Time Performance

•            Global Customer Service

•            Operations and Equipment to Service my Global Needs

•            A Reliable Partner in Our Global Supply Chain

•            Global Information Technology Support

•            Security and Global Trade Compliance

•            Worldwide Price of Services

•            Option of Sharing Distribution Channels With Other Customers

•            Geographic Presence in Required Regions Across the Globe

•            Global Warehousing Capabilities

•            Customs Clearance and Brokerage Capabilities Across the Globe

•            Worldwide Reverse Logistics (Defective, Repair, Return) Capabilities

•            Worldwide Cross-docking Capabilities

•            The Provider Helps us Save Money Across the Globe

Mean scores and correlation analysis were used to determine the five most important characteristics:

•            Port-to-Port On Time Performance

•            Worldwide Price of Services

•            A Reliable Partner in Our Global Supply Chain

•            The Provider Helps Us Save Money Across the Globe

•            Global Customer Service

The unique value of this research is that it aligns the primary concerns of global shippers with their evaluation of how their providers deliver on those concerns. The scores of all the named carriers were tabulated. Mean satisfaction scores for each of the categories was compared amongst carriers and—based on aggregate ratings across the range of top characteristics—our winners were selected.

In addition to ‘The Best of the Best Top 5 Attribute’ winners, we’ve also posted the ocean carriers who ranked above the mean in each of the five categories. These are companies, which in the opinion of their customers, out-perform the sector mean. 

Some Observations From our Partners at Clear Seas:

•            The top five attributes are strongly correlated with Overall Global Performance Ratings of Partners—suggests that the top five are really what matters most to purchasers of ocean transport services

•            No one Partner received the highest satisfaction ratings for ALL FIVE of the attributes.  In fact, a Partner could have been rated as highly as #1 on one attribute yet rated #8 on another attribute. The Performance Partner that can achieve top ratings across ALL of the top attributes will be seen as the “Full Partner”

•            Among the top 5 attributes, “The Provider Helps Us Save Money Across the Globe” has the lowest satisfaction rating.  Money-related items are always lower-scoring attributes in survey research, but the Partner that can really break new ground in this area (and not lose their shirt in the process) will be seen as a true Partner.

“If I was a shipper evaluating different ocean carriers,” says John Thomas, Executive Director, Clear Seas Research, “I would definitely give the World Trade Performance Partners ratings a serious look and add it to the mix of metrics I consider when purchasing ocean transport. This new program provides a very deep dive into how hundreds of my colleagues making actual contract and purchase decisions feel about the different ocean carriers out there. These results most definitely point to who is a ‘Partner’ vs. who is a ‘Supplier’ when it comes to ocean transport.”   

Best of the Best

Orient Overseas Container Line Ltd. (OOCL)

Orient Overseas Container Line Ltd. (OOCL) is a leading container transport and logistics service provider, with more than 230 offices in 58 countries around the world. The company operates a fleet of more than 270 ships, including Grand Alliance member line, feeder, and OOCL-owned and operated vessels. 

OOCL prides itself on some of the fastest and most reliable transit times in the industry. “For us, no job is too small, or too big, and many of our customers are leaders in their respective industries and countries,” says Frankie Lau, Director of Marketing, OOCL (USA) Inc.

Like most ocean carriers, OOCL has expanded its services to meet customer needs. The company offers a global network of terminals and offices, as well as an extensive intermodal network. Through OOCL Logistics, the company provides supply chain solutions through a network of more than 70 offices in 32 countries.

According to Lau, one of OOCL’s key advantages is its extensive knowledge of the Chinese market. “We are one of the few international container transport and logistics service providers to offer truly comprehensive services in China,” says Lau.

The company also has a very strong focus on technology, developing leading edge systems and improving visibility for customers and partners worldwide. OOCL’s Integrated Regional Information System, IRIS-2, was launched in 1999 and garnered a Smithsonian Institute Award for Innovation. “OOCL believes that information technology plays a vital role in the container transportation industry and we have been a pioneer in the use and development of IT solutions for over a decade,” says Lau.

The company continues to invest in R&D to develop customer-focused applications. As well, OOCL is constantly investing in new state-of-the-art equipment including containers of different types and sizes, as well as temperature-controlled containers.

OOCL prides itself on its focus on the customer, and believes in forming strong partnerships. “We believe in long-term, mutually beneficial relationships with our customers and create value through collaboration to enhance customer competitiveness. We see things from the customer’s perspective—understanding their business and anticipating their requirements. We are proactive in meeting their expectations and respond with a sense of urgency,” says Lau.

As an innovative international container transport and logistics service provider, OOCL believes that superior value-added service is a critical consideration for customers when choosing a carrier. Lau says that providing the solutions to customers’ global transport and logistics problems is a strength of the company.

“Each year we recognize hundreds of employees around the world for displaying initiative and going beyond the call of duty to meet all the customer’s needs. Our network and experience in China has led to our reputation as a China specialist and has translated into being able to provide customer solutions when no one else could. We are an industry leader in the use of IT and continually invest in new equipment.”

All of this combines to form powerful partnerships that make OOCL one of World Trade’s top performers.



Yang Ming Marine Transport Corp.

Established in 1972, Yang Ming Marine Transport Corporation is dedicated to providing world-class, global marine transportation services. The ocean carrier operates a fleet of 94 vessels and transports more than 2.4 million TEUs (Twenty Foot Equivalent Units) a year, serving more than 170 points in 73 countries. In addition, Yang Ming offers terminal, global logistics and inland trucking services.

The company maintains strong performance benchmarks to measure the service and quality levels of both vessel schedules and terminal operations. For one such performance measure, Yang Ming established a VTS (Vessel Tracking System) to watch the position of all vessels; the captain in charge of the service does regular checks and will immediately report any discrepancies in the vessel’s schedule. “If a deficiency in our performance is found, we check and immediately review the reasons, and take the necessary actions to avoid it happening again,” explains James Yang, spokesperson, Yang Ming.

Like most top service providers, Yang Ming has a strong customer focus in all their offices around the globe. The company works to develop long-term partnerships with customers through constant upgrades to their services. “We provide our customers with more than just a port-to-port transportation service; we can provide 7/24, one-stop-shop and integrated logistics solutions for those customers who require it,” says Yang.

As well, Yang Ming has developed strong IT services to meet customer needs. A great deal of effort has gone into the development of an e-commerce capability in order to provide customers with the best information and communication tools available. Services available through Yang Ming’s IT platform include schedules, booking, shipping instructions, track & trace, notifications & reports anytime, anywhere. The systems also offer EDI connectivity with Yang Ming, streamlining processes for both the customer and their supply chain partners.

Yang Ming’s focus on top-level customer service seems to be working. The company conducted a shipper satisfaction survey earlier this year, and the response was very positive says Yang. One customer responded with: “I cannot find other shipping companies who can reply to booking requests in 3-5 minutes.”

James Yang credits Yang Ming’s strong performance to long term vision and superior and consistent performance standards. “We are not the biggest carrier, but we endeavor to be a world-class, top quality global company. To secure this, we have solid corporate vision and core values to direct our business development; we consistently implement lasting improvements through performance monitoring systems and continued education and training programs. This assures our competitive edge,” says Yang.



NYK Line

NYK Line is one of the largest marine transportation providers in the world. The company boasts a fleet of more than 775 vessels including bulk carriers, containerships, tankers, and a variety of specialized vessels. NYK also operates terminals around the world, and provides customers with logistics supply chain management and warehousing services. The company also operates a cruise line.

There is a reason NYK Line has been identified as a top performer: the company plans for it, laying a blueprint for success and then sticking to it. Recently, NYK embarked on a very aggressive business plan called New Horizon 2010, which runs from April 2008 to March 2011, and builds on the company’s previous plan, New Horizon 2007. The new plan focuses on three key areas: growth, stability and environment.

In the area of growth, NYK will push for genuine globalization, while a focus on stability (through long-term contracts) will allow the company to weather economic storms. A commitment to the environment will focus on safety and the development of new environmental technologies. The company also aims to foster global human resources, achieve a high level of transparency throughout their business, and continue their efforts in the area of corporate social responsibility. No small order.

When it comes to day-to-day operations, NYK is no slouch either. While strong in on-time deliveries, the company feels that port-to-port on-time performance is not really a competitive factor these days since all carriers offer about the same transit time and delivery schedules are competitive. Also, since a number of carriers now participate in consortiums, the transit times of NYK, Hapag Lloyd, OOCL and MSC are the same since they’re all sharing space on the same ship.

In terms of ensuring customer value, NYK representatives say that visibility and communication of information to customers is one of their strongest value propositions. “We live in an information society. Knowledge of where your shipment is at all times is very valuable,” says NYK’s spokesperson.

Globally, NYK has a substantial footprint, and the company endeavors to offer a consistent service package on a worldwide basis. “NYK’s Group Values—Integrity, Innovation and Intensity are shared by all regions,” says the company’s representative.

At the end of the day, though, it’s ultimately people who provide the service and according to NYK, it is the company’s employees that make them a force to be reckoned with in the world of ocean freight.



Hyundai Merchant Marine

Hyundai Merchant Marine operates over 110 vessels and offers a worldwide global service network, diverse logistics facilities, and leading IT systems. This strong global footprint, coupled with world-class service makes Hyundai one of World Trade’s top performers.

 “This industry has transformed from a port-to-port operation to point-to-point,” says Brian Black, Senior Vice President, Trade and Services, Hyundai Merchant Marine. That means that the demands on ocean freight providers have increased dramatically, not just for traditional services, but for expanded services as well.

In today’s fast paced world, on-time performance and fast transit times are critical, particularly for high value commodities. According to Drewry Insights, a maritime consulting firm based in London that surveys the vessel on-time performance and schedule integrity, Hyundai has one of the highest on-time performance and vessel schedule integrity records of the ocean carriers in the Trans Pacific trade lane (survey 2007-08).

Regular performance reviews with customers and rapid response to concerns are hallmarks of Hyundai’s customer service. The company provides customers with access to customer service centers, and top quality terminal and vessel operations personnel who are available to solve problems. As a result, Hyundai’s customer relationships are cultivated around the globe, and are for the most part, long-term. The company has customers that have been with them for 15 years or more.

 “We are constantly building on our success because this business is a marathon, not a sprint,” says Black. “We must constantly review with our customers the changes in their order process, not only for new products, but also new origin and distribution points.”

Black believes that customers are getting tremendous value from ocean freight companies. “I would challenge any other industry to match the value for dollar that today’s ocean carriers provide to customers.” Practices such as sharing vessels with partners to ensure full loads and vessel to minimize vessel operational expenses are common for Hyundai.

In a highly competitive market, continuous improvement is a necessity. This is particularly true of the ocean transportation business where no single carrier dominates the market. “The profit margins in this business are razor thin and in some years, non-existent. As a result, a carrier must constantly improve if they are to stay in business,” says Black.

According to Black, continuous improvement starts with the customer. “Customers are not hesitant in sharing their views and opinions with us to improve our service.” The company is constantly investing to expand their fleet, acquire container terminals in key global locations and inland logistics facilities, and expand their IT capabilities.

While Hyundai is strong on many fronts, Black believes that keeping the focus on the customer is what gives Hyundai an edge over their competitors. “We implement and execute our focus on the customer. We provide the service we committed to the customer. We also meet the customer requirements year in and year out. Some companies can provide service once or twice or even for a year, however, we have committed to providing the services every year. The customers have recognized this commitment over time and have honored us with their support.”



Hanjin Shipping

Hanjin Shipping Co., Ltd., a member of Hanjin Group, is a global shipping company that is ranked among the world’s top ten. With a fleet of over 200 containerships, bulk and LNG carriers, a network of terminals and inland logistics hubs around the globe, and a soon-to-be-completed ship repair yard in China, Hanjin is a strong player on the international ocean shipping scene. The company has a large global network, with over 300 locations worldwide, and several subsidiaries covering logistics, IT, terminal and ship management services.

This past year, Hanjin Shipping launched its vision for the next ten years as part of the company’s 30th anniversary celebrations. Although the company already has a strong reputation for high quality customer service, chief among its goals was a renewed commitment to Hanjin’s customers through improved customer service and satisfaction. It’s this unwavering focus on the customer that makes Hanjin a top performer.

As part of this customer focus, Hanjin recently implemented a new IT system that enabled them to integrate sales and service functions, and to conduct deeper customer analysis. This has allowed for better communication and understanding of client needs, while also allowing for more efficient operations.

Whatever they’re doing, it seems to be working. Hanjin has a reputation for satisfying the most demanding customers. Through its dedicated and knowledgeable staff, Hanjin has built solid, long-term relationships with partners around the globe. The company has won awards from its customers, including Owens Corning and Samsung Electronics, for its exceptional levels of service.

In keeping with Hanjin’s ten-year vision, the company has also invested in state of the art vessels, new dedicated terminals, and green technology. The aim is to continue to incredible level of growth Hanjin has enjoyed in the past while still providing the highest levels of performance as cost-effectively as possible. To this end, Hanjin is developing logistics operations in key service areas and is branching further into 3PL service offerings.

The company also has a strong environmental focus. In a message from the CEO, Hanjin Shipping president and CEO, J.W. Park says that “As a leading global carrier, our goal is to ensure that environmentally-friendly and ethical business practices always remain the keystone in all our management activities. All employees of Hanjin Shipping, on land and at sea, will continuously work to maintain and further strengthen our high environmental and ethical standards.”

Hanjin Shipping states that its vision is to become “the premier total logistics service provider respected by the global community.” The company is well on its way.



CMA CGM

CMA CGM is currently the world’s third largest container shipping line, offering services along the entire supply chain through integrated maritime, rail, road and inland waterway transport solutions around the globe.

CMA CGM has followed an aggressive growth and development plan. To continue meeting the needs of its clients, CMA CGM focuses on creating new services in dynamic trade lanes, developing strategic partnerships with clients, diversifying intermodal transport services and investing in port terminals to improve reliability. The company has also invested in a modern, high performance fleet that help maintain lower costs.

To enhance its global portfolio of services around the world, CMA CGM has led a targeted acquisition strategy, taking over regional experts with strong experience in their local markets. “This combination of global, regional and local services further improves the way we tackle customers having exactly the same problems, combining our international brands with tailor-made market specific solutions,” says Claude Lebel, vice president, marketing & sales, global accounts, CMA CGM.

On the IT front, CMA AGM is developing new web-based tools specifically for the company’s small and medium sized accounts. “We need to ensure our expanding service coverage goes in line with an ever-growing customer base, even more so in developing markets such as India, Russia, Brazil and fast growing new EU members,” says Lebel.

CMA CGM prides itself on its strong commitment to environmental protection and sustainable development. The company has been actively participating in the Ports of Los Angeles and Long Beach environmental programs and initiatives, which are considered to be among the most aggressive port environmental policies worldwide. For the past two years, CMA CGM has been awarded the Green Flag Award by the Port of Long Beach. The award recognizes vessels that consistently use slower speeds near the Port, which reduces air pollution. Between 2005 and 2007, the company achieved an 8 percent reduction in carbon emissions and is planning another 10 perdent reduction by 2011. CMA CGM has also pioneered the use of eco-containers with bamboo flooring in 10% of its owned fleet. This initiative was the result of a joint effort between CMA CGM and one its major customers, who were looking to promote eco-friendly solutions for the transport of their products.

As one of World Trade’s top performers, CMA CGM feels there are five key reasons for their success. The first is the company’s quick response to challenges and opportunities. “Decision-making in the company is fast and strategy is relayed worldwide through dedicated regional offices. This allows us to respond very quickly to the demands of the market by launching new services on dynamic trade lanes, improving existing services and adjusting capacity where and if needed,” says Lebel.

Other key competitive advantages include the flexibility offered through CMA CGM’s network of maritime, rail, inland waterway and overland services; a high performance, low operating cost fleet; a continued commitment to the environment and a world class, dedicated team of employees.

“Our approach is not to compare ourselves to our competitors but to always try and develop our services to meet our customers’ needs and adapt to new trading patterns,” says Lebel. wt



For more about the results of this study, please contact John E. Thomas, Executive Director, Clear Seas Research at 248.786.1659 or via email at thomasj@clearseasresearch.com