Rotterdam, 13 Jun 2018Andreas Mrozek,
Operational Value Creation - a Carrier's View
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Agenda
Hamburg Süd - Latest Developments
Value Creation - Challenges
Value Creation - Proposals
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*Combining the best of both worlds in operations to deliver the best of both worlds
Best of both worlds for your supply chain
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Commercial
Operational*
Commercial independence for both brands to guarantee the best choice for you
Synergies are expected over time in following operational areas:� Network� Procurement� Equipment� Terminals
Customer
Customer
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The Hamburg Süd customer process remains red
Unchanged local Hamburg Süd process Integrated approach with Hamburg Süd Input Change of current process
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Europe / Mediterranean – South America / Central America / North America
Europe – Mediterranean / Inner Med / Middle East / Pakistan / India
Mediterranean – North America / Central America
Europe – Central America / New Zealand / Australia
North America / Central America / Caribbean – South America
Intra South America
North America – New Zealand / Australia / Pacific Islands
East West Services
Asia – South Africa / South America
Intra Asia
Asia – Central America / North America / South America
Asia – India / Pakistan / Middle East
Asia – Australia / New Zealand
Liner shipping - a global service structure
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Rotterdam, 13 Jun 2018Andreas Mrozek,
Development of Hamburg Süd Carryings 2000-2017(in kTEU)
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+11%
2017
4.686
2016
4.395
2015
4.101
2014
3.375
2013
3.299
2012
3.265
2011
3.125
2010
2.871
2009
2.330
2008
2.669
2007
2.143
2006
1.839
2005
1.525
2004
1.386
2003
1.115
2002
774
2001
752
2000
760
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Agenda
Hamburg Süd - Latest Developments
Value Creation - Challenges
Value Creation - Proposals
Rotterdam, 13 Jun 2018Andreas Mrozek,
Value creation in container transport – carrier view
What do we all want? A smooth and reliable global c ontainer transport chain. Are we there? Not really….Why is it so hard to make it work?
1. Bottlenecks, bottlenecks, bottlenecks
2. Matching expectation with reality
3. Limited coordination and cooperation (also data- & IT- related)
4. Yes, the weather (and other not reliably predictable impacts on operation)
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� In many network- critical terminals productivity improvement falls short of growth
� As a result: Congestion
� Terminals lacking capability to ‘boost’ productivity, if required in peaks
� Disparency of the optimum productivity from Carrier‘s point of viewVersus Terminal‘s point of view and adequate means to find an overall‚right‘ solution with fair pricing
� Adherence to berthing windows vs. first come, first served
Bottleneck: Terminal productivity development
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1
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Crane productivity development 2015-2017 (indexed)
Bottleneck: Productivity development
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1
HSD total
Europe
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� HSD terminals with general good utilization.
� Not easy to move or get new berthing windows
� High terminal utilization = low vessel productivity?
75%?
Bottleneck: Terminal utilization
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0% Yard utilization 100%
Pro
duct
ivity
Tipping point
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� Significant congestion in globally vital ports: Shanghai, Moin, etc, plus several transhipment hubs
� Knock- on effects on many subsequent transhipment hubs and key ports
� Networks improved to become more efficient, offer better end-to-end products, are built with better buffer times and more realistic sailing speeds, but are also more vulnerable as they are more and more interconnected and massively impac-ted by a few ports with heavy congestion.
Bottleneck: Port congestion
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1
Ships at anchor of California in 2015Source: The Loadstar
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� Sometimes (over-) ambitious planning in conjunction with growth aspirations in the marketabsorbs capacity (too short berthing windows, too much volume, too many VSA partners, empty container movements are not factored in …. ‚it will find its way‘….)
� Commoditization of transport – often low value perceived by customers (low price/costrequires high utilization, less and less money in the system, hope that a web-basedplatform provider will fix it)
Matching expectation with reality
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2
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� Ocean carriers use the same limited short side infrastructure (mainly ports & marine terminals) and congest themselves
� But, every Carrier ‚optimizes‘ his own network, at best jointly with his VSA partners oralliance partners. Improvements are done by little adjustments to reduce the pain, but not by overall optimization of the global network
� Each transport company/shipping line has a myriad of data interchanges to thousands ofcustomers, hundreds of ,marine terminals, inland terminals, transporting companies, VSA partners in more than a hundred countries
� Due to the complexity of international trade, the high number of partners, vendors andcustomers as well as the rapid dynamics of change, IT departments are consistentlyoverloaded
Limited coordination/ cooperation (also data/IT- related)
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3
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Weather impact and unpredictability
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4
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Agenda
Hamburg Süd - Latest Developments
Value Creation - Challenges
Value Creation - Proposals
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Productivity and efficiency enhancements
Improvement potential
� Better mutual understanding about improvement chances and limits
� Better and earlier information about expected move count (full/empty)
� Better understanding of network pressures
� No re-keying of existing information, but use of platforms and data interfaces
=> Work as one team together, not as two teams against each other
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Automation and increase of capacity
� Automation delivering constant/reliable productivity – is it also higher?
� High investment, possibly capacity decrease during transition period
� Not addressing some of the possible bottlenecks (# of equipment, management, systemsettings, external regulations,…)
� Next steps forward, AI automation?
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Source: Siemens AG
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Productivity and efficiency enhancements
Information Exchange via EDI
� No basic technological enhancement for 20 years
� Outdated in light of more modern technology
� But still requires rapid expansion to replace e-mail/pdf- lists/etc.
� Higher Frequency of information exchange
� Platforms (e.g. Xvela)?
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Opportunities
Trend: Digitilization and platforms
� Who is the platform and who is being ‘platformed’?
� Operating company?
� Owner of the data?
� Business model?
� Sufficient number of participants?
� Network of portals (ports, providers, Xvela, start-ups, carriers, forwarders, etc.)
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Value creation – the relevant details
� A reliable transport chain has to overcome increasing bottlenecks by closer cooperation, data science, predictive analytics and a role change of the supply chain partners
� Solutions for bottlenecks to be found
� Better transparency in the supply chain (existing data versus AIS). Focus: forward-looking, higher perceived value
� Share data, but first define future business model of supply chain partners
� Re-introduce (global) standardization (also related to codes and IT)
� Discuss an adquate funding of the value chain
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Integration of operations
� Global Integrator of logistics andtransport
� Services along the supply chain in onehand
� One set of data and systems with lesshandover points
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Source: Maersk Line
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