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Ocean Transportation in the Age of Amazon

GSK — Mon, 13 Apr 2020 17:00:37 +0000

With a series of bold decisions and an unorthodox business model, Amazon has gone from a small book company to an absolute juggernaut. While the original mindset among competing corporations was to simply beat them at their own game, this method has proven unsuccessful. Imitation does not work against an entity willing to lose money to eliminate the competition.

In 2015, Amazon entered into the ocean and air cargo businesses, purchasing container space on ships and leasing Boeing planes, taking over their supply chain and expanding their footprint in the global economy. Today, Amazon is equipped with the best technology and analytics available. So, how do businesses compete with a company like Amazon? Differentiation and data are the key.

Do Business with the Commodities that Amazon Does Not Ship

When browsing Amazon’s website, it seems as if they sell everything. But there are several items that Amazon does not sell or ship. Agricultural equipment, aircrafts, automotives, and industrial equipment are bulky items that Amazon does not work with. Ocean transportation companies can place more attention on specific areas where they have gained an advantage strategically, and have captured that particular niche in the market. Entering these less saturated segments will help corporations establish a firm position in the market and competitive advantage.

Use Data to Segment Your Customers Based on Behavior

Companies must learn to let go of outdated business solutions that may have succeeded in the past. Instead, they need to leverage their unique business model to analyze their business and customer data. This will determine which customers and products will produce the largest revenue. Effective data analysis and implementation is the way of the future.

Understand How Sensitive Your Customers are to Price

Companies working in the logistics industry must utilize their data to calculate how important price is to their customers and streamline processes to understand how best to adjust rates. By providing competitive rates and understanding what is important to your customers in addition to pricing, i.e. experience, customer service, personalization, the ocean transportation industry can stay competitive.

Covid-19 is Disrupting Amazon’s Supply Chain

But even a giant e-commerce company like Amazon is being affected by the pandemic.. As the novel coronavirus spreads on a global scale, the increasing demand for Amazon’s services has placed enormous strain on its supply chain. Many Amazon employees are unable to work due to the infection and many Amazon sellers source products from manufacturers, who are currently producing at below average rates. In the current climate, Amazon’s sheer scale may be the very thing that impedes it, creating opportunities for smaller organizations to step in and fulfill needs in the supply chain.

While RTM Lines does not compete with Amazon directly, we have seen how differentiation and data can help a business compete in the ocean transportation market. RTM’s business model of creating “innovative solutions for complex shipments” fills a need in the market. It gives us a competitive advantage especially when transporting cargo that cannot be transported in containers due to weight or measurements. Shipping and Logistics specialists adapting a similar approach can create opportunities for their companies to succeed even against a juggernaut like Amazon.

The Difference Between Third-Party Logistics Companies and Freight Forwarders

GSK — Fri, 31 Jan 2020 10:05:18 +0000

After 40 years in the ocean transportation industry, we still hear these two terms used interchangeably. However, it’s important to note the differences to avoid misunderstandings and confusion. Importing and exporting are vital to your business and being able to differentiate between third-party logistics (3PL) and freight forwarders may be the difference between a great decision for your company, and a poor one.

What are Third-Party Logistics Companies?

When you use a third-party logistics (3PL) company, you are employing an organization to handle your entire supply chain and logistics operations. These service providers will take care of services such as transportation, processing shipments, order management, inventory management, and warehousing. They can also handle your freight and distribution. However, you can usually select the services you need from them and exclude others. With their help, you can focus on other aspects of your business, such as marketing, sales, and growing your business. Some of the benefits to hiring a 3PL company include added flexibility to scale your business at any time, order-fill accuracy, low capital commitment, and more time to focus on core business values.

What are Freight Forwarders?

Freight forwarding companies, freight brokers, or freight forwarders handle all tasks related to the transportation of cargo from one destination to another using single or multiple carriers. They handle all freight-related services between producer or manufacturer to the market, customer, or final point of distribution. They are also known as non-vessel operating common carriers because they don’t move the freight but act as intermediary between you and the transportation services. Freight forwarders provide access to a robust network of ocean liners, rail freighters, trucking companies, air freighters, and many more. With their help, you can get the best price, speed, and reliability you might not get on your own. They also understand all documentation requirements, banking practices, transportation costs, and other information that makes your export process seamless. Services usually include booking cargo space, negotiating freight charges, tracking inland transformation, filing insurance claims, etc.

3PL Services vs. Freight Forwarding

3PL companies and freight brokers offer unique benefits to your business. Nevertheless, the significant difference between a freight forwarder and third-party logistics provider is that the freight forwarder focuses mainly on transportation. In contrast, 3PL providers will handle all aspects of logistics.

RTM Lines works with ocean transport managers, shippers, freight forwarders, manufacturers, distributors and decision makers across the globe. Our objective is to deliver efficient custom global transportation solutions to our customers worldwide while developing long term relationships. To get in touch with us about your next shipment, contact us here.

The History and Importance of Ocean Logistics

GSK — Mon, 15 Jul 2019 05:00:57 +0000

Ocean transportation is an ancient practice. The trade of goods between nations and across seas is a century old occurrence. The idea of using some type of shipping container — be it sacks, bales, crates or barrels — to carry goods also dates back to ancient times. Now, fast forward to the present. Modern container shipping celebrated its 60th anniversary in 2016 and many buyers and sellers of goods utilize ocean transportation as their primary method to ship goods and services between countries.

The implementation of ocean freight shipping eventually led to a revolution in cargo transportation and international trade. Risks such as delays, pilfering, damage, and loss also decreased due to increased efficiencies and better tracking systems.

The History of Logistics

Procured from the Greek term logistikos, the word logistics’ initial application occurred in the military during World War II. The military referred to it as the activity of combining all means of transportation and sheltering of troops. As the war concluded, many U.S. businesses became cognizant of logistics and it’s importance in world commerce. The year 1960 marks the commencement of a period of logistics services for enterprises which continue to this present day.

Business enterprises commonly denote logistics as a multitude of activities that are following a specific sequence, also known as a supply chain. These activities include suppliers, manufacturers, distributors, and retailers.

The Importance of Logistics for Ocean Transportation

The implied purpose of logistics as it pertains to ocean transportation is to make the process of obtaining available goods, materials, and commodities easy from order to cost fulfillment to delivery. Thus, it involves improving the efficiency of flows regarding modes, terminals, routes, and scheduling. In addition, logistics provides the organizational support that is required to make a set of convoluted decisions concerning a multitude of issues such as transport modes, the location of suppliers, and the timing and sequencing of deliveries. Logistics is, therefore, a multidimensional value-added activity.

Ocean transportation has existed for centuries, however, with new technology, it’s capabilities and applications have soared. RTM Lines has led the industry for nearly 40 years, transported everything from an entire oil field of equipment to vintage Corvettes, shipping to nearly every port in the world.

World Commerce is dependant on the trans-ocean shipping services provided by carriers worldwide.