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Jan.26, 2015

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TRADING PLACES 70 THE JOURNAL OF COMMERCE Peter Tirschwell JANUARY 26.2015 ON TAP AT TPM: A POTENT MIX AS WE APPROACH the TPM Confer- ence in March, it's hard to recall any year in the 15 years of this event when the industry was more unset- tled, more dissatisfied and more uncertain of what the future holds. Such is the result of a monu- mentally troublesome 2014, when sh ippers a nd t hei r prov iders absorbed more broadsides from more directions a nd with less notice than any year in memory. All the slowly building pressures on the industry came out into the open in a single year, with costly consequences. As you read this, corporate supply chain planning is being rewritten in an attempt to restore a sense of predictability after a year when any sense of that was scattered to the four winds. You can see how the pressures built, with carriers' accelerating cost-control agenda leading to their withdrawal from chassis, their creation of new alliances and their building of mega-ships, all of which directly impact port operations. Costs must fall at the terminals, which helps explain the breakdown in West Coast longshore talks and is not in any way unrelated. This isn't to assign blame but rather to confront reality. Compe- tition policy demands that carriers compete on price, so prices drop as excess capacity becomes available, and carriers, being private enter- prises, must look elsewhere to find profits. Further, when revenues are declining, costs take center stage, and everyone else feels the impact. Although the causes of weeks- long delays on the West Coast can be explained easily, however, the question is what shippers in particular should do about it. In constructing this year's TPM pro- gram, it's those questions we're trying to answer. We will hear from some terrific speakers this year. Klaus Michael Kuehne, honorary chairman and majority shareholder of Kuehne + Nagel — and grandson of the com - pany's founder — will deliver the opening keynote speech. K+N is the world's largest ocean forwarder, and Kuehne owns a significant stake in Hapag-Lloyd, giving him a broad, global perspective of the industry. We'll also hear from Nariman Behravesh, chief economist of IHS, the global knowledge, data and analytics company that acquired JOC Group in December in what is a great fit for our company. I'll have the honor of doing a one-on-one interview with Maersk Line CEO Soren Skou, where I'll have the opportunity to ask him a broad range of questions on where he sees the industry headed, in North America and globally, and what the coming cha nges will mean for customers. We'll be honored to have the world's foremost maritime econ- omist, Dr. Ma r tin Stopford of Clarksons, who will present his market outlook and then conduct an hour-long solo workshop for those interested in hearing more. The heart of the conference will address the nuts and bolts issues that shippers and their providers face every day in the current envi- ronment. The outcome of West Coast longshore talks are still in limbo and we don't know if they'll be resolved by TPM. But if they are, you can be sure we'll make every effort to persuade the principals to join us in Long Beach and discuss the outcome of this highly disrup- tive negotiating round. We'll explore ways to address some of the industr y 's biggest challenges. Among them are the challenges marine terminals built for an earlier era of small ships, at least by today's standards, have in handling the mega-ships arriving today. Many terminals are becoming overwhelmed by the thousands of containers offloaded in a single port call, which adds to terminal dwell times for containers and delays for shippers. Another challenge we'll exam- ine is chassis. Chassis were like a hunter who quietly lied in wait, for a few years in this case, and then sprang suddenly into action when the time was right. That time was early last year when a combination of stronger volumes fueling a stron- ger U.S. economy and alliances that scattered ship calls throughout the Los Angeles-Long Beach harbor led to a chassis shortage that is only now being addressed through coor- dinated industry action. The solution is to implement chassis pools at Los Angeles-Long Beach and New York-New Jersey, like those that have been put in place in prior years in the U.S. Southeast and other regions. We'll look at the progress and what to expect in the coming months. We're planning six case studies, all anchored by a beneficial cargo owner describing how they were able to make meaningful improve- ments to their supply chain. There will also be a Cool Cargoes track focused on refrigerated container transport. We're expecting a dynamic, intensive four days in Long Beach in March. I hope you'll join us for what is always an enjoyable, enlight- ening a nd overa ll wor t hwhile immersion into the major issues facing the industry in the coming year. JOC Contact Peter Tirschwell at ptirschwell@ and follow him on Twitter: @ petertirschwell.

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