Transportation Management Roundtable, Feb 23

Okay, so while we are getting more people, I'm still trying to figure out how to bring everyone to join. We have a number of people on the line. I want to welcome all of you to this new roundtable on transportation management. My name again is Max Henry from the Global Supply Chain Council. So the idea of that roundtable was basically to do kind of a follow-up discussion on the summit that we organized back in December. Because we had during that event a lot of questions about what's happening around transportation management, freight forwarding, and, you know, all the different, you know, trends happening around freight, both on sea freight but also on air freight. So I invited today 2 industry practitioners. We have Jameson from Schneider Electric and also Omar Kazaz joining us, which I will let both of them introduce themselves, set the scene, and then maybe after that we'll get anybody else to introduce yourself as well to the group. So maybe we'll start with you, James and Omar. You can introduce yourself, and after I'll get, you know, the other people to introduce themselves. Okay, go ahead. Maybe Omar, you start.

Yeah, hi everybody. I am in the United States, so I'm going to say good morning, and to you, good evening.

Omar Kazaz.

I am in Charlotte in North Carolina. I am the founder of Kazaz Advisory Group. We deal with medium and large-sized corporations in terms of negotiations, strategy, and process improvement for spend reduction. So that's in a nutshell what we do.

Okay, thank you. And James, would you like to say a few words?

Yeah, yes, thanks, Max, for the invitation. Also very glad to meet you all here. And my name is James and I'm based in Shanghai. And now I have been working with Schneider for more than 8 years. And before, I'm working with Hewlett-Packard, American company. I think my whole career basically is, you know, in the supply chain period and also managing those ODM manufacturing and, you know, procurement and the plus transportation as well. So the current my position is the transportation and, you know, customer operation and managing those domestic transportation, customer operation, plus international transportation for Schneider China. So I think today I'm also expecting because this will be a pretty year with a very different scenario compared to over the past 2 years. So very glad to hear your voice and exchange ideas. Thank you, guys.

Thanks, James. Okay. Thank you very much. So both Omar and James will help me to host the discussion, maybe, you know, trigger some questions. But we have a number of questions also, because during the registration process, we asked people, and we've been receiving a couple of questions, which I will bring up as we talk. So let's continue the quick round of introduction, maybe present Rajit, you can go ahead and introduce yourself.

Yeah, yeah, okay. Thank you, Max, for the invitation. Hi everyone, uh, I'm a logistics and supply chain professional based out of Mumbai, and I've been on this road for almost 4 decades, and I look forward to interacting with each one of you this afternoon. Thank you.

Thank you. Moving on, Frank. Hi Frank, welcome. Go ahead.

Yeah.

Okay, good afternoon everyone. I come from Shanghai, China, and I focus on logistic real estate consultancy services in China and more than 16 working years. Very nice to meet you online.

Good to see you, Frank. Yeah, thank you. And then we have Arul. Go ahead, Arul, welcome.

Thank you, Max. Hi, everyone. My name is Edward. I'm based in Hong Kong. I'm a content director of my own media startup, and I also run a podcast that serves supply chain professionals. Nice to meet you all.

Okay, good. Next is Glenda. Hi, Glenda. Welcome.

Hi. Thank you, Max. Good afternoon, everyone. I'm Glenda. I am a trade compliance professional. I've been in the business of trade compliance for the last 30 years, working with U.S. companies such as Microsoft, Seagate, Dell, mostly IT, plus of course oil and gas. Yeah.

Okay, great. Good to see you. Next we have Mirek. Hi, Mirek. Welcome.

Yes. Hello, everyone. My name is Mirek. I've been in Asia for over 22 years, most of the time in China. I founded OTMS, which is like a leading SaaS TMS in China back in 2013, and now based in Singapore. We are expanding in Southeast Asia, so we are present in Indonesia and Thailand for now. And yeah, looking forward to, you know, this discussion. Thank you.

Okay, good to see you. And we have more people joining us. I want to remind everybody that I'm promoting everyone to become a panelist. Please accept my invitation so you can then switch on your webcam and your microphone. All right, moving on, we have Shazad. Hi, Shazad. Welcome. Go ahead.

Yeah, so thank you, Max, and good afternoon, good morning to everyone. So I am working for an industrial gases company called Linde. Proud to say that it is the world's largest industrial gases company based out of US, and we are operating in more than 100 countries. So I look after gas distribution network for South Asia and ASEAN, where I look after a fleet for gas distribution in bulk as well as in small package quantities. And working in this field for about 20 years now.

Okay, great. Good to see you. All right, moving on is, uh, Kam Min. Hi, Kam Min, welcome.

Yeah, greetings to everybody. Yeah, my name is Kam Min. I'm working in the healthcare space, uh, right now is in charge of the warehousing distribution for all the healthcare products for all the hospitals in Singapore. And I also experienced in moving big equipments when I was in the army, so for the past 23 years. So welcome everybody.

Okay, good to see you. Then next is Arun. Hi Arun, welcome.

Hi, my name is Arun Pandey and I'm the co-founder at Hyphen SCS. I'm based out of Delhi. We are building India's biggest warehousing and fulfillment platform. We've got around 32,000 warehouses spread across 150 cities totaling an area of around 700 million square feet. We were basically trying to become the de facto platform for anything and everything related to warehousing and fulfillment in India. Thank you.

Okay, good to see you. Then next is Andreas. Hi, welcome, Andreas.

Hello, good morning from Switzerland. I'm based out of Switzerland, close to Geneva. I work for Logitech, a consumer electronics company, and I'm responsible for capability enablement For the global operations organization, and I was based out of Hong Kong for a few years in charge of Logitech's global customer supply chain. So thanks for inviting me.

Good to see you, Andreas. Okay, moving on. We have Ben. Hi, Ben. Welcome.

Hey, hello there. My name is Benjamin Baffo from Ghana, but I'm now based in Shanghai. Actually, looking at all of you with all your profiles, I say, well, I'm just a little one because I'm barely a year in the industry because I was in academia doing studies for long-term researches, and I thought that it was much best to move from theoretical aspect to experience aspect. So the company I'm working for is Shanghai Bayer Neubauer Supply Chain Company. What we deal with is mainly in mainland China, dealing with supply chain issues, logistics, warehousing, inland transportation, and what's not. So basically, I'm very happy that I can learn from much of your experiences, and then if I have questions, I'll also put it out there. Thank you.

Thanks, man. Good to see you. All right, now moving on, we have Rajeev. Hi, Rajeev. Welcome.

Yeah, thank you.

Hello, everyone.

My name is Rajeev.

I'm based in Singapore. I work for Schneider Electric.

I'm responsible.

I'm part of the digital group, responsible for supply chain digitization, more focused on transport and trade compliance.

Okay, good. All right, we have Juan. Hi, Juan. Welcome.

Hello, everyone. My name is Juan Sandoval. I've been in China for eight years, and I've been working in a sourcing office from China to. Latin America, Central America, and the US. And we'll be leaving China soon and interested in transportation as we'll be handling all the imports and exports for our group in, in, in that part of the world. Thank you, everyone.

Okay, good to see you, Juan. All right, so we have a few more people who don't have a webcam yet. I want to remind everyone to, you know, if you— as you— as much as you can to switch on your webcam. So we are— as we go get along with the introduction, we have Sachin. Hi, Sachin, go ahead.

Hello.

Hi everyone. Thanks Max for for this opportunity, and my name is Sachin Trivedi. I'm working with a company called Cargill. We are you know agri commodity company, and I'm based out of Kuala Lumpur, Malaysia. And in my current capacity, I am leading supply chain organization for Malaysia and Australia. So yeah, thanks for inviting me.

Good to see you, Sachin. Okay, uh, we have Veronica, Raneesh, William, Tony, or Supinya. Would you like to switch on at least your microphone or your camera? Yeah. All right, Veronica, go ahead. You are— we can see you.

Go ahead.

Hi everyone, this is Veronica Mo. So I'm currently from China. I'm based in Suzhou. I'm in the healthcare industry working for Philips. in the quality direction. But before, like 2 years ago, before I pivot into the quality direction, I— all my career spending in the supply chain. So I lived and worked in the US for almost 8 years and then moved back to China. Especially, I work in the different area of the supply chain. That's my first time to join this seminar or webinar. So I hope to still be catch up with most of the trend and industry experience from leaders in different industry about supply chain. So I hope that I can learn from you guys, and I'm so happy today. Thank you.

Good to see you, Vernika. Okay, we have Raneesh, William, Tony, Supinya, Khanh. Would you like to switch on your camera or your microphone at least? Yeah, Raneesh, go ahead. Welcome.

Hi, this is Ranish Bera from India, Bangalore, the second largest city of this country. So I am a supply chain professional for last 8 years, and I have been working with different companies in different roles. Started with e-commerce. I was part of Flipkart. Then I moved on to different roles in 3 fields. Now I am part of Ingress, a WMS service provider. as VP of Operations. Nice to meet you all.

Yeah, good to see you, Ranish. Okay, all right, we have still— we have William, Tony, Supinya, Han. Whoever come first, go ahead, introduce yourself. Even with a microphone is fine if you cannot switch on your, your camera for whatever reason, if you want to say a few words. William, Tony, Supinya, Han? No? Okay, all good. All right, so maybe, well, you know, if you want to introduce yourself, just drop me a message and I'll give you the ability to do so. Okay, so again, as I explained earlier, this is again a follow-up discussion to the event. Feel free to bring any topic or questions. We had already some questions which have been raised during the registration process, but maybe I'll get first James and Omar just to kind of open the discussion and, you know, to trigger some, some interest and maybe some further questions. Omar, would you like to just say a few words about what's happening in the freight, especially on the freight, you know, space right now globally? Yeah.

Thank you, Max and colleagues.

We—

it's like as we saw in the last couple of months lately, since maybe November, December, rates fell from a cliff. We're talking about 80-85% on some trade lanes, especially on the Trans-Pacific. And that is going, I think, to be followed by a lot of events such as acquisitions, or on the other hand, divorces, let's call it, such as what's happening between the 2 largest carriers Maersk and MSC. While I— from my opinion, what I see is while it looks like the consumer is going to be benefiting and the shippers are going to be benefiting at first sight, but in the end that war is going to be detrimental to all of us because even though rates may go down even further and those 2 giants are going to be fighting over us customers and BCOs, the beneficiary large accounts, they have 2 different strategies. One is going to— like Maersk is going to be in the integration business, basically eliminating freight forwarders. And MSC is after volume. So that's what happened in the— with the divorce. So that is going to call for elimination of services. So we're going to have fewer services, fewer sailings, and It's only a matter of wait and see at this point what, what will happen. So rates may go down a little bit more, but eventually they will go up again because they will have to stabilize that market. What's happening is not normal.

Okay. Thank you, Omar. James, would you like to just maybe share what you've been observing also in the last few months when it comes to freight and transportation with your perspective from China or from China to the other countries?

Yeah. Yeah, I think, firstly, I think I agree with the point of Aman mentioned about that. Of course, I think a different region, like, you know, between Europe and China, and, you know, with North America, may be a little bit different, slightly different, but that the overall trend should remain the same. And I think, to be honest, I think because we are managing this kind of period, I think For us, over the past 2 years, international freight has been a big challenge for us, not only for the price and also for the space. And to be honest, I think as a member which in this industry for so many years, it's abnormal. It should not be a normal scenario. So I think this is the good time for back to the normal and back to the normal scenario that, you know, the companies, regardless carriers like Maersk, they would like to extend their roles, and also like CMA, they prefer to stay with their current, you know, as a carrier and the shipper and managing those fleet and space. And all you would like to, on the other way, that you will extend your from the forwarder, 3PL, to a kind of, you know, own some kind of space or freight. But I think it is more like that it would be a big challenges for those forwarders and for those carriers because they needed to be more professional, more agile, and also more sensitive to the customer voice and the customer needs so that they can win the market. So I think it is good for the industry to, you know, upgrade to a next level. Yeah, that is my personal take.

Okay, feel free to comment or ask questions. Yeah, Prasenjit.

Yeah. Just to get back to what Omar was initially saying about the shipping companies kind of taking over from the freight forwarders and kind of building in those services to the client directly. What, what the impression that I've been getting is that The— would the shippers— first of all, do the shippers, shipping companies have the infrastructure to kind of take care of the freight forwarding function that the freight forwarders have been doing till now? That's one. And secondly, I was also reading in an article maybe about 2-3 months back that Musk was in the process of purchasing aeroplanes for air freighting products from one point to another point. Now Is this going to be a regular feature between all these shippers that they will eventually acquire these operations themselves and do away with the people in between? Or is this a kind of a one-off situation that we are noticing today? Because the transition is going to take time. That's not going to happen overnight. It's going to take time for the customer to realize that the freight forwarder is not in the picture. He's going to get one bill from the shipper, which is a point-to-point Service right from the source to the destination, which is good if it happens. And, uh, but the transition will take a little time. So I, I would— if Omar could just kindly expand on that a bit.

Yeah, Prasenjit, you're absolutely right. They did, uh, basically everybody and their brother wanted to get into air freight when the— when, when we were spending on, you know, we were spending, let's say, 60 cents a kilo or 50 cents a kilo Uh, from let's say Shanghai to Los Angeles, right, or Chicago, for example. And then it went up to at some point maybe $15, $14 a kilo. It's insane, right? So everybody, everybody meaning Maersk, you're right, uh, CMA got into the air freight business. However, what happened lately is that when the market calmed down, CMA itself is trying to I don't want to say get rid of it, but they leased some of their airplanes to DHL, which is an indication of what happened to those prices after the prices went down, after exactly what James mentioned, that it's back to, let's say, normal. They found themselves with excess capacity that they cannot handle because they didn't have the infrastructure for it. They did it on a whim, right? So when they saw an opportunity to make money and to gain more customers, and do vertical integration. I think it backfired a little bit, and that's why they're starting now to find space for a home for their airplanes, at least CMA.

Yeah, that's what I thought. Yeah, that's what I thought, because this is going to take time. It's not going to happen overnight, and they will really have to establish the links properly before they can tend to move ahead.

Right.

And, and if you remember from maybe like 15 years ago or so, All the major carriers, especially Maersk, they tried to get into the vertical integration and they opened, right, you know, places in, uh, in India and Puerto Rico, and it backfired very bad service-wise, right? So they canceled that whole project. That was more than 15 years ago, probably 20 years ago. The only difference now is now they are sitting on a, you know, between all the large carriers, they're sitting on about $300 billion. So now they have a lot of cash to be able to last longer in that new project that they've done before. So we'll see if they become successful at that.

We had Sachin and Mirek who wanted to say something. Sachin, you wanted to raise something?

Yeah, just to, you know, add a point over here. In you know the last couple of years, and at least the last year has been an unprecedented profit environment for shipping lines. And we were reading different news articles around enhancement of the new capacity, and there were you know a lot of new orders of new vessels in in in the pipeline. And you know. It has been envisaged that the capacity will be increased between 20 to 30, 35% in next couple of years. So what would be the impact of that vector on, on the current scenario of, you know, crashing freight rates? That—

you want me to take it, or James, or anybody wants to take it?

Feel free, yeah.

Okay, uh, Sachin, this is very, very, very important, and I think this is one of the reasons why the, uh, you know, the, the alliance falling apart between Maersk and exactly what you mentioned, between Maersk and MSC. Uh, they had, they had the common, uh, common goal at when, when during the pandemic And there were reasons for for for that merger. Now that those reasons disappeared, there is no reason for that alliance anymore. But back to what you mentioned, they they went both different ways. MSC was was going wild on purchasing old vessels, and they placed orders for I believe if I remember correctly at least 28 mega ships that some of them will come into existence in 23, 24, 25. So Now they don't need Maersk anymore, and that's exactly what's going to happen. You have so many new vessels coming in the market, and is there demand for them? Obviously demand has gone down drastically, so that's one of the reasons why they separated. What will happen? I wish I could— I wish anybody would have like a crystal ball, as they say. Unless demand picks up, it's going to be a very brutal couple of years from making obscene amounts of money for those guys to basically going after customers, that was the time where they wouldn't even answer your email. You know, if you want to say, guys, I want to sign the contract, you would not even receive an acknowledgement. We're at a time now where we're being called daily, please, let's talk, please, let's do something. So very happy about that.

Thank you, Omar.

James, you wanted to add something? Go ahead.

Yeah, Max, maybe add some, because to be honest, I think from my understanding that even in, you know, transportation, international transportation market, if you are carriers, you manage those shipping lines, and if versus you are forwarding, it means that you are more providing a kind of a tailor-made supply chain service and offer those proposals. Actually, these 2 parties are very different in terms of the competency of the team and also the organization of your— the whole organization back to support this kind of service. So I think, to be honest, because we have also engaged with both like forwarders like DHL, Okinawa, and versus the, you know, those Musk, and Musk is going to manage would like, willing to take more and more, you know, forwarding this kind of scope of the business. But still take time, and also it will be also a very challenging, you know, transformation for Maersk to how to transform their own organization to be more agile, more adaptable to the very timid services requirements from the customers. Because managing shipping line is more a standard process you can manage. You can have digital ways, you can have teams as a kind of service provider, and you can also manage those facilities in a more standard way. But when you're managing and consolidating those different requirements and the different products and the pallets together, it's a totally different competency. So I think that is also why, because it's obvious Musk is selecting a different strategy. So I think it will more like in the shipping lines, it will be a— may still remain a very competent and also very strong competitor for the other shipping lines. But for the forwarding-wise, Musk is going to be their competitor, direct competitors. I think that's why also behind that, why this kind of alignment can be can be to the end. And maybe the market is also observe, the other competitor observe how do they position Maersk and how do they take and integrate, or whether they will continue to use the space from the different shipping lines, you know, easy like before. So I think it's behind is also have a very different, you know, ways to manage business.

Okay. Yeah, Mirek, I'm sorry. So you raised your hand, you wanted to add something. So go ahead. Yeah.

No, thank you. No, it's great because actually I think I wanted to— I think James already covered one of my points. It's about this vertical integration of carriers. You know, having worked or started my career with Maersk when back then it was called— the logistics arm was called Mercantile and later Maersk Logistics and later Damco. And now this turnaround again. I think this is irrespective of how much money they make and what strategies internally they pursue. I think, you know, being a carrier essentially being asset-based provider, no matter it's ships or it's airplanes or express or road freight. I mean, you should have a very different strategy, right, than being an asset-light 3PL that is supposed to meet requirements of the— of all kinds of requirements, all kinds of transport flows of your customers. And when you mix these 2 things together, it's not just about organizational capability. You can always, of course, keep hiring people, but these are inherently different strategies from the business model, right? And obviously, for example, being a player in the industry and same time trying to outsource it to other carriers, it's just, I don't think this is going to work. And the second point to that is also the way the shippers work, or at least the largest shippers that I'm pretty sure Maersk has in mind, or when I was with DHL, it was the same, right? We have global supply chain solutions. We try to offer this so-called one-stop solution predominantly for our whatever top 100 or 500 largest customers. But as you know, all the participants here working for the shippers, often the considerations are not to actually consolidate. The big shippers, the big retailers, manufacturers, they have huge organizations that are actually focused on slicing and dicing these different contracts into small chunks instead of relying on a single player. So paradoxically, this is the model that would work well best for the SMEs. When I, for example, work for DSV, that company that is very much focused on SMEs, or was at least until recent acquisitions, definitely there are companies that, that would appreciate it. And then of course having that as a carrier, being able to offer that, it's great. But, you know, whether they can pull it off, I think it's very difficult, right, to see. And finally about this, what will happen that, you know, new ships will come on the market, you know, I mean You can just— I mean, this is basically the pork cycle the industry has faced from the inception, right? I mean, anyone who read like the book The Box by Marc Levinson, I think he can see how many companies went bankrupt, you know, when the technology changed or there was overcapacity on the ships. So I think it's just, you know, they can enjoy the money they have earned and, uh, you know, survive through the downturn, right? It's just, just gonna be like this forever, you know. I don't think that with all the brains and experience, collective experience of decades in the industry, right? They couldn't help on investing the ships when the market was high, even though they know what's gonna come, right?

Thank you, Amir.

Yeah, thank you.

Juan, I, I know you wanted to also add something, so if you want to switch on your microphone, go ahead.

Yeah, yeah, I just wanted to ask, uh, because we're talking about capacity if the recent requirements, environmental requirements for the shipping lines will affect those capacities or not.

Good question. Anybody?

I think they will. They will. Things absolutely. And that's— I think that's what's going to increase prices in the short term. Yeah, you know, government policies, increases in the price of oil. I think that would be a major factor. It used to be 50% of what we pay, and when the prices went down— went up to $21,000 per container, that price became negligible. But now that prices went down, it's going to go back to 50%, I believe, to being a big chunk of that.

Okay. Thank you.

And anybody else has a point or question related to freight or what's happening in the market? We can talk also about, you know, digitization of transportation management. There are a lot of different topics. Feel free.

Yeah.

Technologically speaking, I think they're behind the times still. It's very strange that with all the money that was made, we're still dealing with— I mean, we talk about technology a lot, we talk about Internet of Things, we talked about blockchain, but it doesn't look like it's taking, or at least from what I— from my angle, maybe it's different, but different colleagues have different experience, but from my angle, it seems like we're not even there's no interest in that whatsoever, and I understand partly it's legal because nobody wants their laundry to be out in the open, so, but it's still so behind the times when it comes to whether it's the BCOs or whether it's the carriers or whether it's airlines, I don't know. Manufacturing has done a better job, but still, we're not where we should be, I think, but I may be wrong.

On this topic, we actually had a question which came through during the registration. Someone was asking, how do you actually right now, given the current environment, effectively manage transport fleet utilization when the demand is always fluctuating? So that was a question being asked, I think, by someone called Arianto. Can anybody help or maybe provide advice on how do you actually manage That fleet utilization right now.

Max, is that shipping fleet or road transport fleet? What was he talking about?

He was— he hasn't said, but I think we can maybe talk about general. It could be, could be probably more related to road transport fleet. Yeah.

Yeah, because as far as road transport fleet utilization is concerned, it depends predominantly on 2 major factors. One is the availability of loads, regular availability of loads, and secondly is the return load factor coming into play again. Are there loads for the trucks to come back to load on and bring them back? And in India specifically, if I could talk about India, 65 to 70% of the transportation that's done domestically is by road. So there is tremendous pressure on road transport in India, which is why there is a lot of overloading which takes place. Like, let's say a truck has a payload capacity of 10 tons, he'll probably load 15 tons because he wants to carry more and kind of bring back almost the same load at a cheaper cost, thereby kind of pleasing the customer, at the same time carrying the loads that are available. But having said that, the last 6-7 years A lot of these companies have tried to create technology platforms, IT platforms, in which the loads are kind of available for all to see. The routes on which these loads are brought into— to be transported, that's also available for all to see. And the number of shippers that are available on those routes are also available. So they're trying to reorganize this unorganized industry. and make it a little more kind of effective in terms of load balancing, in terms of time, in terms of transit, etc. It's taking a bit of time. It's not happening so fast because you can't change something which has been going on for centuries in the span of a decade. So it's taking a little bit of time, but I feel road transport eventually will become more systematic, more effective, and fleet utilization will become a lot better.

Okay, thank you, Prasenjit. Anybody else on this who can provide recommendation or advice? Yeah, James.

Yeah, yeah, I think for the load transport, to be honest, I think if we look into this, you know, load transportation market, how are the trucking companies to make money? Because they take the usage of, you know, from the different customer. Maybe the customer have a smaller, you know, cargo and volumes, they kind of cannot fit into a good, you know, fill rate for the trucks. And then they combine a different way, but at least at the linehaul, they can maximize usage of their trucks and have a very strong, you know, fill rate. Then they can make money from that. Okay, so of course, other customers like Schneider, we We have the same situation because if we have different products and we even from Shanghai we have different plants to shipping out the different products. So it means that in one shipping port pickup you cannot have a very good, you know, volumes to fulfill those 4 truckloads. So we have to use the LTL models. We have a condition with the trucking company via LTAM model. But I think that is the opportunity that how do we really, as a, you know, shippers, how do we really have a very professional network? And also, of course, by doing that, because behind they have different, you know, supply chain models. So you also needed to have the power to influence your supply chain. How do we manage our upstream? How do we manage our products How do we make usage of the dimension of pallets? What's the best ways to fulfill the truck fill rate by using a right packaging height and the dimension? So I think this is the ways now we are looking at. And for us, recently we launched a project we call China Transport Domestic Transport Net Modeling. That we also add those switch center and the hub as a kind of buffer. So then we can enjoy this benefit from the transport forwarders that we already have a lower kind of a good, you know, freight rate. We don't need to pay the LTL price so that we can have a lower price. Of course, that will be a challenge for our existing, you know, transport companies because they are there, the margin for them will be less because before they— that job is done by themselves. Okay, so I think this is the games between the shipper and the transport forwarding companies. But I think, you know, now if you have a very big network and supply chain-based presence in China, there will be a big chance to make it happen.

Thanks, James. Yeah, Juan, you wanted to add something?

Yeah, I, I would like to ask about technology because, I mean, that sounds great in terms of if you have the visibility of the information regarding, uh, the loading capacities of the, of the trucks, the containers, the loading from the suppliers and the goods, uh, the information is available and the technology is available, but the problem is integration and integration of all those different platforms and entities in the supply chain. So you have the information integrated from your own system, from your own ERP, to your suppliers, and then through the shippers and the trucks. So I wonder, how is that integration done? And if it is feasible among so many entities in the supply chain?

Yeah, well, maybe I can take this. I think you asked very practical comments, and that's why, you know, that to be honest, now how do we still achieve a sustainable, continued cost saving for like a company like us? Because every year we have a cost down. So it's a very challenging topic for us. So it informs us to be more professional. We think as a kind of trucking companies. And of course, I think because over the past year we have in China, we have 21 plants and plus 6 DCs. And the good thing that last year I have integrated all of the, you know, different entities transportation team in my organization. So I think if you would like to do that one, you also needed to a kind of a strong and one operation team behind to support. Because as you said that, I think from the different entities, they have their own, you know, those priorities and they just care about their products. They don't care about the other entities, right? That's their priorities. But if you have very strong teams and you know, to lead, you know, from the different plant. And of course, then you are also offer a kind of a proposal which can prove that the benefit from this one, the whole team was supporting. But I think it is, if you are still a very decentralized organization, it will be a little bit challenging for you to realize that. So myself, that because I take the position now is almost 2 and a half years, When I start to take this position, I plan all of these things that I say that if we would like to have a very strong or best transportation teams in the B2B market to manage our transport and the forwarders, we must have not only we know, we needed to know the every physical process, how from the end to end and every potential stops. We also need to have a strong information, but also not the least, we also need a very one team, one integrated transportation team. So that is, you know, a plan for Schneider Transportation. So luckily I made it happen last year. So I think for us it's easier to manage. And also we already launched this kind of transformation in Eastern China.

Thanks, James, for sharing your experience. We have 10 more minutes on this discussion. You know, I see some people actually dropping their name and contact details in the chat. So if you haven't done it, feel free to leave your name, maybe your email address or your LinkedIn profile link on the chat so everybody can stay connected and whoever is interested, they can connect with you directly.

All right.

10 more minutes. 10 more minutes. Do we have another question or point that you'd like to make? Feel free to, you know, raise your hand or just switch on your I want to say, Max, that Juan mentioned—

I can't speak anymore, it's too early— Juan mentioned the most important word ever, visibility. That, I mean, that will answer the question that our— like, somebody asked a question about the fleet. So many companies, and it doesn't matter even if they're big companies, the visibility is not there, and from my humble experience, it's not there sometimes because for that specific company, transportation is not on the radar of the CEO or the top brass of the corporation. Number 2, the reason why it's not there, because companies, so many of them have grown by acquisition. Let's say I am running SAP, okay, SAP, and I acquire company XYZ, which is running on Oracle, and we don't want to spend the money to combine both. So really, on paper, we are one company, but in reality, we're still operating as 2 different companies. You already don't have visibility from day one, much more so when you acquire that other company and you don't integrate, like James said, So then that's when you have a problem internally, much more so when you're going to find a load for those trucks. That's from my humble experience.

So thank you, Omar. Yeah, Mirek.

Thank you.

Yeah, thank you, Omar. That's obviously touching some really key things that are, you know, dear to me. And I offer a transport management software, and I think also what What basically Juan was just asking about the technology, how to actually— Juan Felipe, right, asking the question earlier. So like technology is there. For example, we do the— OTMS is doing basically about 100 million shipments a year. And for example, like Cargill is one of our key customers in China. We're basically in a market that is like so fragmented, so many layers of outsourcing. We had to from beginning start with SaaS. with mobile apps, even with WeChat apps, you know, iOS, Android, and so on. So we make sure that the shipment that's been, say, intaken to our system from shippers' ERP eventually ends up in the hands of a driver somewhere in, you know, 2,000 kilometers away for the last mile, right? So, and I have to say the technology, at least from our point of view, is no longer the challenge. I think what you just mentioned, the challenge is up to the— I mean, you're, you're 100% on a target, right? The visibility or whatever, transportation management, It's not really on the agenda of the GM or a CEO in most companies. In the companies that it is, I have such customers, they made some really amazing transformations. They really actually digitized. And yeah, also if the organization is complex, I also fully concur with James, right, that you need to create your own transport control tower team that can, for example, operate in these complex organizations and try to centralize Although, as probably Cargill and Schneider can attest to, it's very difficult, right, to actually standardize because I think that's what's dragging digitization for years. Nobody understands transport that well. It's always an outsourced activity. And we can get away with, for example, spending hundreds of millions of RMB or whatever, tens of millions of dollars, you know, validating, for example, expenses by Excel spreadsheets, right? But we can say mistakes can occur. And this is the reality of 99% of even the largest companies in China, right? I mean, 99% of our customers are first-time users of TMS, right? Of course, the US was same maybe in 1980s, as I understand, right? So I think there's really no real solution, I would say. You know, I really, after 10 years, I don't see the solution. Blockchain is another great technology that could work. It's just like a, you know, tool Looking for an application, but where are the actual benefits? For example, take the visibility, right? So much marketing money has been spent by players like Project 44 or Forkites— visibility, visibility, right? But if you ask yourself, like, what is that? And you know, when I was in Mars, for example, in 2000, we tried to do the same thing 22 years ago across different modes and also didn't work out, right? You can say technology was more poor and something blah blah, but the reality is It's not like a magic bullet. You just get this visibility and you have solved anything. To me, this is still data that is just a raw material, and it's not really like a magic pill for a diet. You know, you take the pill and everything works. It is more like a gym program. You have to really work out hard to make sense of this data. For example, back to China, like an example would be, yes, multi-layer outsourcing. We work with many carriers, but actually often we work with carriers which are exclusive to a specific territory. Even the large organizations like the present here today, they will have the carrier that has maybe exclusive contract for a year for a territory. So like, what can you do with this data? There's no competition. It's not like US, right, where you have lane depth, you have organizations of a size like present today using multiple carriers on the same lane. And then, for example, using this data to actually make some actionable decisions. Like, for example, what I saw, what people like the best. And also the truly digital organizations like Amazon or Cainiao or whatever, you know, the ones that actually grown from digital, they really spend a lot of time spending, for example, daily on actionable live dashboards, right? Which is totally different DNA than we in the B2B where we get a review with customer on a QBR with the data that is 3 months old, you know. It's very difficult to create this change, like you said, Omar, without, for example, the senior management involvement. And there is rarely any in this sector, right? I mean, among the shippers. And yeah, when it is, it works great. But it's, I would say, like, you know, 1 out of 10 in terms of our customers.

Thank you, Mirek. Yeah, thanks a lot. Okay, we have got 5 more minutes. Anybody else had a quick question before we wrap up? We'll finish, I promise to all of you. you 5 minutes before the end of the hour. So if you have another call or meeting starting, or you have to leave because it's late afternoon for most of you in Asia, you'll be able to do so. Any quick comment or question?

Max, I think maybe it's a kind of exchange with Marek because I'm also thinking about that, thinking something that after our meeting in Singapore that, you know, why, you know, in the B2B market and, you know, those IoT markets, we are so difficult to integrate. Of course, a lot of things which is out of our control, out of, you know, expectation. But I'm thinking maybe we can, you know, lower our ambition and expect tolerance that we focus on those integration leg by leg. We start with the pickup, because it is more easier to integrate. And we also focus on the linehaul. Last mile we don't touch because last mile at this moment is very fragmented, you know, to the different customers with a very different table service that will be touched the customer satisfaction for the B2B customers. So I also have some kind of exchange with, you know, those some people and in the market. Maybe another time we can have an opportunity to exchange that how do we do something in this market and we start focusing on the first mile plus linehaul, then we leave the last mile to the end of our ambition.

Yeah.

Okay.

And if you need help, James, to put together a panel or a roundtable on this topic, I'm happy to support you, you and Mirek as well, and so we can do that. across Asia and have an interesting talk. Okay, anybody else? We have a few more minutes, feel free. Omar, or anybody else?

Nothing at this time, but what was mentioned was so, so, so important from all the panelists. It's an unbelievable Meeting of minds, except mine, of course.

But okay, yeah, I know it's it's it's a little bit early for you, Omar. So exactly. Are you gonna go to bed or are you just waking up and just go?

No, no. I usually I usually wake up at four.

Okay. All right.

Exactly. So by by by five o'clock, I'm I'm up and running. You know, Asia goes to bed and then Europe goes to bed and then they sleep again. You know, Asia is waking up. So nonstop, as you know, right?

Okay. Yeah, Juan. Yeah, go ahead.

Yeah.

Well, I would like to ask about security. We had some experiences in the past about container seals being opened and copied and then get the cargo contaminated because we export from countries that have drug issues and we export to US. So being the cargo being contaminated by drugs. So I wonder if you have some experience in terms of technology or security issues. So to protect the cargo and protect from seals being copied.

Anybody on this? Yeah, quickly.

Yeah. I want to quickly quote the example of MSC, what happened maybe a month or two back when that ship got caught off the coast of South America, and they had all the technology that was needed, but still they found the drugs in the containers. The ship got impounded, and eventually MSC got into a lot of trouble. So I think while technology definitely does help to kind of enhance the security, of the product while in transit. I think a lot of it is man-made, and I think that's what really needs to be addressed and corrected so that the safety and security of the cargo remains the way it is.

Okay, Juan, just to— because we need to wrap up the discussion, we will actually run a roundtable discussion on security in supply chain logistics in the coming weeks or months. I'm actually putting together a group of experts on this, so I will let you know and invite you to this. And we will also, we will also talk about cybersecurity as well during that discussion. Okay.

All right.

So I made a promise to let you go 5 minutes before the end of the hour. It's 5 minutes before the end of the hour. So thank you again for joining this discussion. Thank you, Omar, a lot for—

Thank you.

being awake with us and sharing your advice. I also want to thank James for sharing your experience. We will do this. I want to do this on a regular basis. So again, if you have other topics for discussion, feel free to drop me a line, contact me directly by email or directly on chain.net. So again, thank you for joining this roundtable discussion, and there will be more coming up. I will let you know. And so have a great evening if you're in Asia. Thank you. And I look forward to see you next time. Thanks a lot.

Thank you.

Thank you, Max.

Thank you.

Thank you.

Thank you, Mads.

Nice to meet you all.

Thank you.