2015 NCBFAA Annual Conference

NCBFAA Shippers Association

Emergence of Shippers Associations

• Shipping Act of 1984

• Ocean Shipping Reform Act

• NVOCC direct contract with carrier

• Co-Load with potential competitors

• Shippers Associations

Shipping Methods

• Shippers associations are required to be not-for-profit.

• Shippers associations are not immune from antitrust laws.

• Management of an association must be independent of the members.

• OTI License and Bond required for inclusion in contracts.

Operational Guidelines

Established Working

RelationshipRealistic

Expectations Sponsors Members

Support

ASSOCIATIONSUCCESS

ASSOCIATION FORMATIONASSOCIATION FORMATION

CREDIBILITY

Barriers to Success

• Potential members try to negotiate with the association.

• Protectionist issues - refusal to share information with

Association management.

• Potential members think they are too big or too small.

• Unskilled management company.

• Members that do not report shipments “fairly”.

• Benchmarking Rates.

• Improve international market reach.

• Control carrier bid/bullet rate process.

• Provide leverage for rates.

• Supplement member’s staff.

• Provide framework for rate and assessorial updates.

Core Competence Of Management Co.

Rate reductions – Market intelligence.

Multiple carrier weekly sailings.

Multiple options during critical peak sailings.

Improved visibility with the steamship lines.

Customer service at higher levels.

Access to multiple contracts with no exposure.

Quick reaction to accessorial changes.

Member is shipper of record for the carrier.

Members control the Association.

Refund of excess revenue.

Association Benefits

Individual Savings Vary

• Location.

• Willingness to “think outside of the box”.

• How well members and their agents know their markets.

• How well members can project their requirements.

• How often we file member’s rate requests…that result in moving cargo.

NCBFAA Shippers Association formed. Worldwide Logistics retained as management company.

Smaller NVO’s all in. Larger NVO’s support specific contracts.Assist members in confronting deregulation.

1999

Rates go online through new partner CargoSphereLCL and LTL added to offerings

20022004

1999

Improve operations and communicationsImprove CargoSphere interaction and contract visibility

Fine tune carriers and markets

2014200520022004

1999

Major system updates 3Q that will improve response and presentation of our member’s shipping and billing

2014200520022004

1999 2015

Why did we choose CargoSphere as a partner?

• Specialized supplier of technology for management of buy-side contracts and rates and sell side rates and quotations. 

• CargoSphere is specialized just on needs of freight forwarders and NVOCC’s - regional and global.

• One of world’s leading providers with over 3,000 users in 46 countries.

• Founded in 1999 and serving the NCBFAA-SA since 2002.

• We have grown with CargoSphere

Why use CargoSphere and what is its value?

• We enter our rates into CargoSphere and use CargoSphere to manage our contracts. 

• We use the CargoSphere Rate Mesh to ‘share’ them with all members that have a CargoSphere system.

• The CargoSphere system is better than spreadsheet delivery• always current• always available• searchable and filterable• can be automatically used in quotes on CargoSphere quoting system

Do you have to use CargoSphere?

• No, we can give you rates in spreadsheet form. 

• Most members now use CargoSphere.• CargoSphere has over 3,000 active users• Over 6,000 contracts managed

• Reduces the time and increases the accuracy of quotes back to our members

• Reduces manpower required.

• CargoSphere has a special commercial offer for our shipper association members.  Go to their booth to learn more. 

NCBFAASA 1999-2001

US IMPORT

US EXPORT

NCBFAASA 2001-2005

US IMPORT

US EXPORT

NCBFAASA 2005-2010

US IMPORT

US EXPORT

NCBFAASA 2010-2015

US IMPORT

US EXPORT

NCBFAASA CARRIER COVERAGE

MAERSK

CCNI

NCBFAASA CARRIER COVERAGE

MAERSK

CCNI

YML

NCBFAASA CARRIER COVERAGE

MAERSK

CCNI HANJIN

YML

NCBFAASA CARRIER COVERAGE

MAERSK

CCNI HANJIN

YML OOCL

NCBFAASA CARRIER COVERAGE

MAERSK

CCNI HANJIN

YML OOCL

NYK

NCBFAASA CARRIER COVERAGE

MAERSK

CCNI HANJIN

YML OOCL

NYK

MARFRET

NCBFAASA CARRIER COVERAGE

MAERSK

CCNI HANJIN

YML OOCL

NYK

MARFRET

COSCO

NCBFAASA CARRIER COVERAGE

MAERSK

CCNI HANJIN

YML OOCL

NYK

ZIMMARFRET

COSCO

NCBFAASA CARRIER COVERAGE

MAERSK

CCNI HANJIN

YML OOCL

NYK

ZIMMARFRET

COSCO SEALAND

NCBFAASA EXPORTS

SOURCE: BROOKINGS INSTITUTE

2009 2010 2011 2012 2013 2014

3,366

3,834 3,976 4,0383,943

4,276

FCL ACTIVITY

2007 2008 2009 2010 2011 2012 2013 2014

82

97

102 99105

100102 103

MEMBERSHIP

25%

33%

39%

3%

1 to 9

10 to 50

51 to 200

201 +

TEU PERCENTAGE SHIPPED BY MEMBER.

Chart illustrates that SA not dependent on large members for survival. Smaller companies are taking advantage of SA as NCBFAA envisioned in 1999.

GLOBAL MARKET – MEMBER PERSPECTIVE Frustration over unstable rates – monthly GRI’s.

Constant increases squeezing member profits and straining customer relationships.

Congestion = lost business.

Carrier service levels are in a downward spiral.

Equipment availability.

Sufficient chassis.

Decline in Door Rates (SD) versus CY rates.

Lift capacity.

Terminal congestion.

Customer Service.

CUSTOMER SERVICE SUPPORT

NCBFAASA fields an average of 200 emails per day.

60% rate issues.

Rate requests.

Rate lookup in CargoSphere and SA contracts.

30% problem solving.

Rating errors.

Space issues.

Securing equipment.

10% service information.

Routing look up.

Transit time.

Carrier announcements.

MAINTENENCE

NCBFAASA signed 575 contract amendments during 2014.

Constant Monitoring of carrier contracts for updated GRI’s and surcharges.

Continuous updating of rate sheets.

Continuous updating of CargoSphere.

Carriers require updated OTI - Bond and notification on expired or revoked bonds.

PARTNER PROGRAMS

LCL Partner - Carotrans

LTL Partner - Landstar

Online Rates - CargoSphere

KEEPING IT COST EFFECTIVE

Container fees have not increased since NCB was introduced in 1999.

Membership dues – tiered $$$ levels based on employees.

NCB operates on very thin margins

Balancing of providing quality customer service vs controlling rate shopping

Any NEW first year member can join for 1 year for $100

WHAT DO WE DO

Keep Shipping simple.

Use NCBFAASA contacts to resolve carrier issues.

Provide Alternative pricing to your existing portfolio of carrier contracts.

WHY MEMBERS USE NCBFAASA

Provide customer service that is lacking from the steamship lines.

Help members avoid the aggravation of contract maintenance.

Access to competitive rates without signing your own contract.

Ability to access online rates via CargoSphere.

Low cost to use NCBFAASA contracts.

Market information.

Q&A FOR YOURSHIPPERS

ASSOCIATION