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January 2 2023

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Page 22 of 131

Januar y 2, 2023 | Journal of Commerce 21 EXECUTIVE COMMENTARY 2023 ANNUAL REVIEW & OUTLOOK Shippers solution. I think the time is ripe, after all the disruptions that we have had in the last two years, to get together and remodel using our collective experience and the new technologies that have emerged; of course this should include components of ESG and sustainability. Thermo King Bruno Fusciani Global Commercial Leader As a brand of Trane Tech- nologies, Thermo King is uniquely positioned to lead a move- ment to tackle climate change, empower customers to decarbonize, and address issues such as food loss. Trane Technolo- gies' 2030 Commitments, including secure the optimum raw material supply. So we are shoring up our existing sales and operations plan- ning process and putting focus on the accuracy on forecasting, real cus- tomer demand, capacity matching, and supply. In 2022, we saw sub- optimal reliability in transportation and communication between provid- ers and shippers. This led to increased inventory in transit which was not useful to the consignee, the shipper, or the transporter as it was occupying unproductive space or working capi- tal. So, the focus will be on discipline, both internally and externally, ensur- ing that what is indicated through forecasts, schedules, and contracts are actually adhered to. There will always be volatility, uncertainty, complexity, and ambiguity in the supply chain, but collectively this should not be used as an excuse for non-performance but as an opportu - nity to differentiate ourselves. To achieve this goal I am encouraging a candid discussion with all parties on the table to seek an operational in the form of inflation that touches everything we consume. As our government is using tools from 30 years ago to deal with this, the over - all effect on the economy is proving to be negative. When I look at just our industry, the impact here is that volumes of cargo have dropped or are dropping precipitously. Base cost for carriers has not declined but rates to shippers are falling to what might be unsustainable levels. It is the full swing of the pendulum. Some of the drivers of the economy are stalled or collapsing under the pressure of quickly increasing interest rates. Purchasing power of the consumer is shrinking quickly, yet it seems the employment needs are still in demand. What does this mean for 2023? I would suggest that the import needs will be in decline for a while as the ability of the consumer to buy freely will be more difficult, and as a result inventories will need to be reduced. Exports will slow even more as the strong dollar and high interest rates will affect the foreign buyer and cause them to look at places other than the US for the goods they need. Remember: every - thing we sell to the export market can be found somewhere else. I would suggest that we all hang on; it may be a bumpy ride. Solvay USA Siva Narayanan Director of International Operations and Warehousing As we move into 2023, we are addressing high inflation rates, higher interest rates, the possibility of a recession, high energy costs, and geopolitical uncertainties. Therefore, the main challenge as we go into 2023 is to right-size our inventory, which now costs more, and have it in the right places so that we can react quickly. As a manufacturer of specialty chemi - cals, our challenge is not only to manage the finished goods but also Signify Gregory Boyle Director, Global Sea Freight Now that the new normal is upon us and carriers have once again learned how to make a sales call, we start to wonder what it is we are going to buy from our ocean carriers in 2023. Some carriers have opened up new logistics ventures featuring everything from warehousing, parcel, air, brokerage, and LTL/FTL. Other carriers have decided to invest heavily in larger ves - sels, which would lead one to conclude that they will soon be offering a larger global footprint for us to purchase from. On the surface, these additional offerings from our core carriers may seem enticing. However, the problem that we face is that core services we have been buying from our ocean carriers are broken. Why, then, would we attempt to expand our partnerships into these new ventures when the basics are already not working? For instance, vessel on-time arrivals are still hovering at 50 percent. It is even worse for on-time metrics for door delivery, which carriers could at least partially blame on their subvendors. Another broken area is in transit visibility. Carriers are pretty good at telling us where the vessel is (thank you, AIS), but once it hits the berth, all bets are off. It becomes an even bigger black hole once it outgates. Add into the equation things such as confusing terminal appointments, volatile chassis pools, and grounded vs. wheeled rail yards, and you start to question why one would expand into other logistics ven - tures when the scorecard for basic ocean services is so poor. When we question our ocean carrier partners about these service failure anomalies, we are usually told it is out of their hands. If these basic service features can't be controlled, why would we look to expand our logistics footprint with them any further? One of our goals for 2023 will be to partner with carriers that have a clear, structured approach toward our primary objectives. These include areas around sustainability, digital roadmap, investment plan, schedule integrity, in-transit visibility, and most importantly, organizational effectiveness. Carriers that prove they have mature offerings in these areas will be the ones that will earn our business. "The problem that we face is that core services we have been buying from our ocean carriers are broken. " ◀ "As we move into 2023, we are addressing high inflation rates, higher interest rates, the possibility of a recession, high energy costs, and geopolitical uncertainties." Siva Narayanan ▶ "Reliable, temperature-controlled equipment providing security, traceability, and temperature monitoring has been critical." Bruno Fusciani

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