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Digitalizing the container supply chain
INTERMODAL SHANGHAI , MARCH 2017
BCG XCHANGE
Introduction
2014 Idea, conception, start
2015 MVP launch
2016 Worldwide roll-out
2017 80+ members
Johannes Schlingmeier
Christian Roeloffs
Head of Commercial &
Business Development
Head of Product and Operations
Our journey so far
Global container forecast: Cloudy
1. If prolonged bullish demand, ships will speed up and idled ships will come on line; effective capacity on water to increase by 0.5% in 2018, 1% in 2019 and 1.5% in 2020, Source: IHS World Trade Service (Q2 2016), Alphaliner, Drewry, BCG container flow model
Bull scenario1
Base case
Bear scenario
TEUDemand
Bull scenario1
Base / bear
TEUSuppl
y
TEU capacity on water vs. container demand (MTEU)
In 2020, excess capacity in the range of 800k–2M
TEU, the equivalent of 40–100 ULCV
Beyond current orderbook, some measured new orders and most of Idle fleet introduced
back to active fleet
2015 2016 2017 2018 2019 202018
19
20
21
22
23
7.5%—8.1% 7.7%—10.5%7.5%—11.0%
6.1%—10.4%3.7%—8.9%
7.7%
Short term supply growth driven by existing orders; no significant further
additions to book
As traditional levers are exhausted –digitalization opens new possibilities
low
Direct sales
Online self service for clients
Real time vessel monitoring
Predictive maintenance
Fleet bench-marking
Asset sharingData driven mgmt
Cloud based software solutions
Route optimization
highImplementation
effort
✓ Sales force effectiveness
✓Network optimization
✓ Slow steaming
✓ Idle time decrease
✓ Terminal cost optimization
✓D&D optimization
✓…
Traditional levers… … and new, digitally enabled levers
low
high
Impact
T&L players in related fields blaze the trail
Common success factors• Learn to think agile:
Iterate quickly, launch in beta and improve
• Find partners: Don't go it alone, leverage 3rd parties strength
• Listen to the data:Replace gut feeling with data based insight
• Chipping at the margin: In transportation, every cent counts
low
low
high
Impact
Direct sales
Online self service
Real time vessel monitoring
Predictive maintenance
Fleet bench-marking
Asset sharing
Data driven mgmt
Cloud based software services
Route optimization
highImplementation effort
Success stories from the industry
Route optimization
United Parcel Service
What: Eliminated left turns from delivery routes
Effect: Cost saving, improve reliability
Predictive maint.
Danish Railway
What: Analyzing all rolling stock data
Effect: Cost saving, service improvement
Data driven mgmt.
Amazon
What: Opening Logistics operations to realize same day del.
Effect: Increase in sales, quality and customer retention
Asset sharing exists elsewhere—full potential for container shipping yet to be unearthed
low
low
high
Impact
highImplementation
effort
A proven concept in B2C/C2C…
… with ample applicability to container shipping
Asset sharing
Direct sales
Online self service for clients
Real time vessel monitoring
Predictive maintenanceFleet
bench-marking
Data driven mgmt
Cloud based software solutions
Route optimization
A digital opportunity with major cost savings potential: asset sharing
Interchange potential per country as
percentage of imbalances5% 95%N/A
Interchange potential per region as
percentage of imbalancesxx%
29%
14%
25%
16%
Latin
America
Europe
Middle
East/ISC1
Asia
North
America
15%
1. Indian Subcontinent. Note: The percentage for the interchange potential is calculated as the number of potential container interchanges divided by the sum of container surpluses or deficits, as reported by marketplace participants. Source: BCG xChange data; BCG analysis.
$15-20M annual savings available for average global carrier
Annual avoidable empty moves
Potential
120-250,000
25,000 95,000
RemainingInterchanges today
Backup
xChange:Digitalize your container supply chain
• Enable an agile workflow and real time insight in the containers supply chain
• Collaborate with new partners and leverage win-win potential
• Organize your data, gain access to new business intelligence tools
• Continue to save cost to maintain a competitive edge
Increase your efficiency,Kickoff your digital agenda
The container supply chain – digital end to end
1Post your equipment problem
2Match with available partners
3Negotiate and agree the terms
4Receive release refs and gate outs
5Track your containers online
• Costly surplus• Specific one-
way demand
• 80+ partners with active opportunities
• Multiparty agreement for quick resolution
• All relevant info and docs in one place
• Overview over your shared equipment
Let's discuss this further…
Take a tour and try xChange
Discuss your digitalization agenda in container logistics
Explore immediate cost saving opportunities
Booth G32
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