Category Archives: In The Press

Mergers and acquisitions in Transport sector set to supersede 2014 levels

Mergers and acquisitions within the Transport sector

In 2015, mergers and acquisitions (M&A) in the Transport and Logistics sector will supersede the levels seen in 2014, according to KPMG’s latest Transport Tracker.

The first quarter of 2015 has already seen completed global transactions worth £6.7 billion, and further acquisitions valued at £6.7 billion have already been announced. In 2014 the increase in the volume of transactions resulted in £39.6 billion worth of deals.

The report found that purchase prices rose which meant that the average business valuation of transactions in the transport sector increased in 2014 to 11.9x of EBITDA, compared to 9.0x in 2013. This was due to the increase in strategic acquisitions and the increased appetite for takeovers of transport companies combined with low availability of suitable target companies that are for sale. The trend is set to continue in 2015.

Other key trends that the analysis has revealed as drivers for the continued increase and high level of M&A activity in 2015 include:

  • Consolidation, geographical expansion and vertical specialisation remain the predominant reasons for transactions in the sector, as evidenced by the bid by FedEx for TNT Express.  This is an example of a classic geographic play to strengthen FedEx’s European ground and air network. The relatively high multiple/premium to share price suggests that FedEx sees significant synergies in this deal.
  • The increase in private investment in transport infrastructure operators in the sector will remain a key driver of business transactions. Governments in both emerging and mature markets increasingly lack the financial flexibility to ensure sufficient investment in infrastructure. This increasingly comes from private investors, who are in turn in search of stable sources of income.
  • M&A activity has evolved in the context of the increasing digitization of the transport industry and the strong influence of the growing e-commerce business. To develop new business opportunities, many large logistics companies are increasingly targeting shares into specialized IT and e-commerce enterprises. Even the more traditional maritime industry has recognized the trend for targeted investment in IT companies. In the future, transactions of this model will increasingly characterise the M&A events in the transport sector.

UK head of transport at KPMG, James Stamp, said: “Total deal values of transport & logistics transactions in 2014 amounted to £39.6 billion and we expect this figure to be superseded in 2015. In addition to high-volume transactions for the purpose of inorganic growth (particularly by US companies as a result of the strength of the US dollar) we expect selective acquisitions of specialized IT and e-commerce companies will increasingly shape the M&A strategies of transport companies.”

Secrets of the Orient: uncovering Singapore’s frothy supply chain

Singapore is consuming more wine than ever before

The popularity of booze in Asia is growing – in a recently published report it was revealed that alcohol consumption in China is increasing at such a pace it has left Britain, the US, and even the Irish in the dust.

Elsewhere within Asia, (southeast to be precise) alcohol has been hitting the headlines for similar reasons… Singapore has come a long way from Tiger beer; buoyed by a buzzing craft beer movement and the exemption of duty on imported wine and liquor in 2009, Singaporeans are quaffing back more bubbles than ever.

Evidence of such an upsurge can be observed through the announcements of policy-makers, for instance The China Morning Post reports on how Singapore is clamping down on late-night public drinking. According to Singapore’s Deputy Prime Minister Teo Chee Hean the booze controls are a response to consistent complaints from Singaporeans about drunkenness in the common areas of housing estates.

During our time at Procurement Week 2015 in Cardiff we spoke to Peter Woon about the evolving procurement landscape in Singapore and across Asia. Peter serves on a multitude of different professional boards including the Supply Chain Asia Board of Advisors, and Advisory Council for IACCM Board of Directors.

Peter on the changing face of Singapore’s supply chains

It’s a hub for almost everything – from manufacturing hi-tech goods to bio-pharmaceuticals, chemicals, aerospace, MROs, and most-recently in the last five years it has become a regional wine hub… The consumption of wine in Asia is growing, all through Hong Kong, and Singapore… It’s a very different ball game altogether.

What has caused this newfound popularity? And more importantly, why Singapore?

You have all the big players, all the logistic players, and the flagships in Singapore. Big companies are moving their central procurement teams here [from India], global headquarters, regional headquarters – they are then flying out of Singapore and moving things within the region.

As you know 40 per cent of the world’s manufacturing from Europe and the US has moved over to Asia. It has started moving to South Asia and then China, from China to India and Vietnam.

Singapore has so far done well – it has found a niche. It is smart, nimble and fast, so has developed something of a competitive edge. And it’s not just been achieved by having these hubs, to have the hubs you need to have support – the infrastructure support. Being centrally located is great, but you also need the financial support – having all of the banks in Singapore makes transactions easier. Plus all of the big insurance companies are there, so the jurisdiction, legislation, and contract management is all transparent – you’ve got everything you need to do business. If you don’t have all of this support, then you’re not attractive enough…

Digital is easy: talking digital transformation

The importance of upping your digital game

Digital transformations are underway at most large businesses as they respond to customers’ adoption of smart devices, with organisations working hard to harness the efficiency gains arising from channelling as much as possible through websites and apps.

However, in its latest research, Coeus Consulting warns that its experience shows many such initiatives are failing through too much focus on creating a shiny new veneer of webpages and apps, with not enough thought going to the core of the business, its culture and back office systems.

The research identifies four key areas that need attention in order for any organisation to execute a successful digital transformation:

  1. Legacy IT systems: legacy IT systems and the interfaces into them require transforming, to ensure new technology is not held back by slow-moving central IT.
  2. Operational change: business transformation and process change.
  3. Culture: organisational-wide cultural change is needed to support the new ways of working (including ensuring the necessary behaviours, skills and approach)
  4. Execution: strong governance, as well as project and programme management, are needed to ensure the transformation stays focussed, on track and delivers the required benefits.

Ben Barry, Head of Strategy at Coeus Consulting and co-author of the report comments, “The pace of digital transformation is moving like never before. For companies to succeed we believe they must understand their existing landscape as well as the challenges from the complexity of new interfaces into their existing IT systems, the changes needed to business processes together with employee behavioural change.

“These all need to be addressed in order to execute a digital strategy successfully. However, we have seen these elements often get looked at late in the process, or after new technology is live, meaning little or no return on the investment.”

Matthew Headford, Head of Technology and Architecture at Coeus Consulting, also warns that “the back offices which support the shiny new digital platforms are often neglected and therefore put under strain.” 

However, Coeus says that there are nonetheless huge prizes for businesses who achieve digital success. Examples of these include:

  • Bookmaker Paddy Power has transformed itself from owning a host of local gambling organisations to becoming a successful international gambling platform.
  • Tesco surpassed the expectations of its customers by providing a new iPhone bar-code scanning app. It is a great example of a brand that stretched the use of technologies to provide greater utility to customers than even they might expect.
  • Aggregators such as comparethemarket.com and moneysupermarket.com have made shopping online for highly regulated services simple and effective (and highly profitable for these businesses in the process).

Procurious will be putting technology under the spotlight on 30 April at the Big Ideas Summit. Find out how you can get involved by joining our Procurious group, and Tweeting your Big Idea using #BigIdeas2015

How do these 130 countries rank when it comes to supply chain disruption?

Taiwan has improved its commitment to managing natural hazards.

FM Global (one of the world’s largest commercial property insurers) published its Resilience Index on Tuesday.

The Resilience Index is claimed to be the first “data-driven tool and repository that ranks the business resilience of 130 countries and territories to supply chain disruption.”

The tool is intended to provide supply chain managers an understanding of the risks involved in operating a supply chain in countries they’re not familiar with.

In order to achieve a resilience score (100 being most resilient and 0 being least resilient) countries are analysed across 9 key drivers of supply chain risk. These drivers are further classified into three high level categories: Economic, Risk Quality and Supply Chain Factors.

Norway’s Up and Venezuela’s Down

This year saw Norway come out on top of the rankings and Venezuela pick-up the unfortunate 130th and final ranking. Ukraine and Kazakhstan saw the largest year-on-year falls (both dropping 31 places). The former related “directly to Russian military intervention there” according to a statement that accompanied the report. The index also highlighted the ongoing conflict in Arab region with Islamic State and the Ebola outbreak of late 2014 as areas of significant concern.

Taiwan Soars

The year’s biggest climber was Taiwan, the island nation climbed 52 spots and now sits 37th overall after improving its commitment to managing natural hazards.

“This rise shows an increased awareness of the natural hazards and fire risk exposures inherent to the country, the building of new facilities to a higher level of quality and greater acceptance of risk management measures that can better existing protect facilities,” said Bret Ahnell, executive vice president at FM Global.

Speaking on the importance and relevance of this index the vice president and manager of research of FM Global said, “All of us live in a global environment now. Our daily lives are dominated by the global economic landscape that’s become increasingly brittle. The Resilience Index has been put in place to help address this issue of global risk.”

Find out more about the Resilience Index here

Lost at sea: 4 big risks facing the maritime sector

Shipping losses lowest for 10 years but mega-ships and cyber-attacks pose new threats for maritime sector.

How many shipping containers were lost at sea?

Shipping losses continued their long-term downward trend with 75 reported worldwide in 2014, making it the safest year in shipping for 10 years, according to Allianz Global Corporate & Specialty SE’s (AGCS) third annual Safety and Shipping Review 2015.

The British Isles, North Sea, English Channel and Bay of Biscay has been the location of the most shipping casualties since 2005 (4,381). Nearly one in five of all incidents (18 per cent) have occurred in this region. It was also the scene of the second highest number of casualties during 2014 (465), up 29 per cent year-on-year. The East Mediterranean & Black Sea region was the top hotspot (490), up 5 per cent year-on-year. Total losses in the British Isles and surrounding waters doubled year-on-year during 2014.

Over reliance on electronic navigation aids has caused a number of incidents in 2014. Captain Rahul Khanna said: “Inadequate training at grass roots level is to blame for this overdependence on e-navigation tools. The minimum standards have been met, but this is not good enough. We need to go above and beyond them to give robust training.”

The most common cause of total losses is foundering (sinking/submerging), accounting for 65 per cent of losses in 2014 (49). With 13 ships wrecked or stranded, grounding was the second most common cause with fires/explosions (4) third, but significantly down year-on-year.

According to the report, there were 2,773 shipping incidents (casualties) globally (including total losses) during 2014. December is the worst month for losses in the Northern Hemisphere and August in the Southern Hemisphere. For every total loss in the Southern Hemisphere there are 7 in the Northern Hemisphere.

The most significant risks identified in the 2015 Safety & Shipping Review include:

Increased threat from cyber-attacks

Cyber risks are another new threat for a shipping sector which is highly interconnected and increasingly reliant on automation.

“Cyber risk may be in its infancy in the sector today, but ships and ports could become enticing targets for hackers in future. Companies must simulate potential scenarios and identify appropriate mitigation strategies,” said Khanna. “A cyber-attack targeting technology on board, in particular electronic navigation systems, could possibly lead to a total loss or even involve several vessels from one company,” said Gerhard.

Other scenarios include cyber criminals targeting a major port, closing terminals, or interfering with containers or confidential data. Such attacks could also result in significant business interruption costs, notwithstanding liability or reputational losses.

Condition of ship and crew

While the long-term downward trend in shipping losses is encouraging, recent casualties such as Sewol and Norman Atlantic have once again raised significant concerns over training and emergency preparedness on passenger ships three years after the Costa Concordia disaster. Seven passenger ships were lost during 2014, accounting for almost 10 per cent of total losses. “In many cases construction of the vessel is not the only weak point. These two incidents underline a worrying gap in crew training when it comes to emergency operations on ro-ro ferries or passenger ships,” says Sven Gerhard, Global Product Leader Hull & Marine Liabilities, AGCS.  

The general shipping trend for smaller crews means seafarers are being asked to do more with less. Minimum manning levels reduce the ability to train people onboard, which can provide invaluable insight and should not become the normal day-to-day level for safe operations.

Rise in geopolitical uncertainty

The recent rise in geo-political tension around the world is concerning. The increase in human trafficking of refugees by sea creates search and rescue issues. More than 207,000 migrants crossed the Mediterranean in 2014, driven by the civil war in Syria.

The International Maritime Organization estimates at least 600 merchant ships were diverted in 2014 to rescue people, stretching resources and rescue infrastructure. Conflicts in the Middle East also put increasing pressure on the supply chain. Ships should not underestimate the security risks.

Piracy risks move from Africa to Asia

Although there has been good progress tackling activity in Somalia and the Gulf of Guinea, ensuring global attacks (245) are down for a fourth year in a row, piracy thrives elsewhere. Attacks in South East Asian waters are up year-on-year, as are incidents in the Indian subcontinent, with Bangladesh a new hotspot.

How do you go about transforming a bribery-entrenched culture?

Procurious has been in Cardiff attending Procurement Week 2015. We heard from Simone Davina General Counsel & Company Secretary at Siemens Netherlands, on the challenges of rooting out bribery and rebuilding trust.

Inspired by Simone’s words, we set about charting Siemens’ course on its road to recovery. Read on to see how it reversed the damage done.

The bribery scandal that rocked Siemens

Siemens on transforming a bribery-entrenched culture

We don’t want to teach you how to suck eggs, so there’s no need to school you on on the big ‘C’ – Corruption. Suffice to say that this threat is a scourge for all mankind, and has devastating effects on even the world’s strongest economies.

Fined in 2008 to a tune of $1.6bn – this record legal settlement served as a (highly-costly, overtly public) wake-up call to the German conglomerate.

US authorities charged eight former executives in connection with a $100m (ú64m) foreign bribery scheme. The bribes related to a $1bn contract to produce national identity cards in Argentina.

This was not the first time Siemens’ was thrust into the bribery spotlight. Allegations around deals between Siemens AG and Greek government officials during the 2004 Summer Olympic Games in Athens regarding security systems and purchases by OTE in the 1990s.

…As a result Siemens set about building a self-cleaning initiative.

How do you turn around a company like this?

If Siemens’ was going to get a second chance it would require an almighty effort. Collaboration with investigators, compensation for damages, guarantees that the situation won’t happen again – achieve all that and you’re just scraping the surface…

Challenges to scale this work across countries. Not so much of a problem in the Netherlands, but harder when it comes to China, the Americas etc. But if a company of such a size as Siemens can’t do it, then who can? That was the question Siemens’ CEO Peter Löscher was posed.

Peter Solmssen – Siemens general counsel, also believed that global cooperation was key. “If we, the major companies and, really, anyone in private industry, link arms, we can drive corruption out of our markets. I call it the Cartel of the Good. If we cooperate, then there is no bribery.”

In years before, Siemens’ operated in 190 countries across the world (with these distilled further into 70 clusters). Löscher reorganised this sprawling cluster system by condensing down to 20, and creating a steering committee to manage on a quarterly basis.

Out with the old – a seismic change in culture

In senior management 80 per cent were moved outside of Siemens. The old boys network had to be disbanded. In order to break the cycle, the peer-pressure, the whole culture needed a shake-up. Reinvigoration.

This was just the beginning – you could say that “bribery was Siemens’ business model”. An investigator from around the time of the scandal pointed out that internally Siemens referred to bribes as “nützliche Aufwendungen,” – a German accounting euphemism that meant “useful money”. But we must remember that until 1999, the act of turning a bribe was considered legal practice in Germany. German corporations were freely allowed to deduct bribes from taxable income. However, this was a new millennium and corruption was still very much at the core. Löscher realised in order to successfully weed-out the detritus he would need help from the very individuals with dirt on their hands.

The Guardian reported: Löscher offered his workers a deal: He promised that anyone who came forward to admit their involvement in bribery would get full amnesty. Not only wouldn’t they be fired, but the company promised to help with any legal problems stemming from these admissions. On the other hand, those employees who didn’t come forward, but were later found guilty of bribery, would be fired. Solmssen estimates that “about 130” employees came forward to admit their role in bribery and to explain where the money had gone.

In an interview with Harvard Business Review (Nov 2012) Löscher would later muse: “The scandal created a sense of urgency without which change would have been much more difficult to achieve, regardless of who was CEO. Siemens is a very proud company with a history of innovation and success. In the absence of a catalyst like this, people would have asked themselves, ‘Why alter anything?'”

In the period between the offence (2008) and that HBR interview, Siemens would invest in a 500-strong compliance team, instill a former Interpol official to head-up the newly-created investigations unit and put the company-wide compliance programs into place. An online portal would also be used to begin integrity dialogs, allowing staff to evaluate risk when starting tenders with companies. Siemens wanted to be in a position to end agreements if it suspected non-compliance – even going as far as carrying out audits at desks.

This welcomed in a new era of transparency for Siemens – for the first time it was placing itself very much in full view, demonstrating its meteoric changes to a quiet, questioning public.

By 2008 almost half of its 400,000 staff had undertaken training in anti-corruption issues.

Is the electronic market the answer to procurement headaches?

Are e-auctions the future for procurement?

Procurious is in Cardiff for Procurement Week 2015.

Answering our call of ‘what are other countries doing to innovate in procurement?’ We were given the opportunity to hear from Michal Ohrabio from Anasoft.  In Slovakia procurers are looking towards the Slovak Electronic Market (or the ‘Gov eBay’ as it’s more commonly referred to ). This online portal functions as an alternative buying hub, and encourages procurers to think about the buying process in an innovative and refreshing way.

How can we make the processes more efficient and automate them?

The challenge this project tries to address is the procuring of common goods and services below the threshold, while maintaining good prices. Authorities and state institutions (ministries, state-run business, local governments) can bid at this portal for the purchase of smaller goods and services and construction work.

So what we’ve got is a catalog of subject matters: simplified procedure, anonymous CA, and suppliers during the tender. After closing the contract everything is made public and process is published.

The new portal will reduce the procurement process from 3 to 4 months to one week. Furthermore, it is an important anti-corruption instrument due to the fact that national and local governmental organisations will be purchasing live and online.  It is hoped that this will help to improve the fairness to suppliers as well as government purchasers.

For state procurers, the value range of available goods and services is from 1,000 EUR to 134,000 EUR; for other procurers, the range is from 1,000 EUR to 207,000 EUR. The upper limit for construction work is 5,186,000 EUR. Registered companies can offer their goods, services and construction work.

The pilot was launched in September 2014, and roll-out began in earnest in Feb 2015. To-date the portal has signed-up 6500 suppliers.

Innovation in the public sector: the rise of the smart, super connected city

High speed Broadband

How are we innovating in the public sector?

Procurious is here at Procurement Week 2015 in Cardiff. We have heard from Jim Smart – Head of Digital Cardiff, on the challenges that public procurement is facing in order to lay down the infrastructure that leads to innovation.

Cardiff is a city primed for growth, and it’s certainly no stranger to innovation – it’s a city that’s prospered not just economically, but socially and culturally over the last few decades.

By procuring broadband and bringing WiFi to the streets of the largest city in Wales, Cardiff will become a real smart city. The welcoming of this first class digital infrastructure will mean Cardiff benefits from the best penetration of superfast broadband throughout the UK Core Cities. It will also offer free to access WiFi on buses across the city and public buildings.

Joined-up procurement is healthy procurement

In this modern age, broadband access and a working Internet connection is taken for granted. But we often forget about the complexities required to get us online in the first place. It’s not just a case of plugging in to connect.

A number of pre-requisites are required to make Cardiff’s wireless dream a reality. The ingredients you will need: an Internet Exchange in the city centre, and a new highly secure Data Centre development. The Exchange itself is worthy of note, it not only represents an important £3.5m investment but it’s one of only four Internet Exchanges in the UK.

Such a monumental piece of work means a joined-up approach is needed in the city. You can’t have one procurement team not talking to the other, every party is required to pull together and champion transparency throughout the tendering processes. Superfast broadband is an enabler for innovation – the procurement itself should champion the super connected ethos, the one infrastructure, that will be borne out of this work.

At this stage it is also one of the first projects that will come in on time and under budget. Music to the ears of anyone involved in the initiative – procurement professional or otherwise!

Once the work is complete, the emphasis will be put back on the infrastructure. BT, Virgin, and Sky (to name but a few) all stand to benefit from the innovation Cardiff is being injected with.

cardiffbay

Cardiff – the ‘One City Planet’

Outside of the work that Jim and his team are involved in, thirty councils have been selected to carry out feasibility studies for something called the ‘Future Cities Demonstrator Programme’- and of those is Cardiff.

Cardiff, like many cities around the world, is facing challenges managing its growth in a sustainable and prosperous way. The project will see the development of a virtual 3D city model to collect and manipulate data in order to monitor and control vital city functions such as, energy, transport, health, water, waste etc, in a holistic manner and develop a full understanding of how they interconnect and inter-depend.

The project will focus in particular on the role of Cardiff City centre as the heart of a rapidly growing city and as the retail, leisure, commercial and transport hub for city-region of 1.4m people. It will work with businesses, universities, third sector and citizens to ensure the delivery of a vibrant, prosperous, low carbon, healthy and happy city, and will form the platform upon which Cardiff can achieve its ambition of becoming a ‘One City Planet’ by 2050.

Internet retailer Amazon on putting people first

File of a box from Amazon.com is pictured on the porch of a house in Golden, Colorado

Work hard, have fun, make history

Procurious is at Procurement Week 2015 in Cardiff – ahead of our exclusive interview with Amazon’s Gary Elsey – Operations Manager for Amazon.co.uk, we present some bite-size tidbits into Amazon’s people-centric philosophy.

Amazon in 1995 – started life an online bookstore (VHS, DVDs, CDs etc. came later), but at that time there was no discernible way of searching through the product listings. A far cry to the behemoth that stands before us today.

Amazon on customers

Amazon’s vision is simple – no matter what it’s doing, what products it’s launching – the customer is always the end goal.

As a company Amazon has always strived to work backwards from the customer. ‘What can we do differently, how can we distinguish ourselves and innovate?’ These are all essential touch-points that the Seattle-born retailer has obsessed over since day one.

For an example of Amazon’s customer-centricity, look no further than the release of Microsoft’s Windows 7 operating system. When it went on sale, as soon as Amazon sold through all its original allocation, it made the ballsy move to direct customers to competitors websites. No ‘out of stock’, or ‘awaiting stock’ messages here… Amazon is an altogether different beast.

With seperate online properties operating in United States, United Kingdom & Ireland, France, Canada, Germany, The Netherlands, Italy, Spain, Australia, Brazil, Japan, China, India and Mexico, ultimately logistically problems do arise… But here is where Amazon plays its trump card, as the retailer offers almost-instantaneous conflict resolution. If you choose not to opt for online chat or a response by email, an Amazon representative will offer to phone you back.

In Amazon’s history there have even been examples of purchases being personally delivered when the situation dictates…

…On passing back savings

Unlike most, Amazon employees don’t carry business cards. Why? They’re an unjustifiable spend. Amazon always asks, ‘does the customer need this?’ If the answer is no, then the outcome is quite clear (no business cards…) It shouldn’t surprise you to learn that every decision is examined in this way. Amazon always seeks to maintain low operating costs, so it can pass the savings back to the customer.

…On hiring

Amazon’s ethos is very much: ‘I’d rather interview 50 people and not hire anyone than hire the wrong person’

…On inspirational leadership

‘My own view is that every company requires a long-term view’ – Jeff Bezos. It is worthy to note that making a profit is not one of Amazon’s goals. Instead it employs elements of Simon Sinek’s Golden Circle Theory: ‘What, how, why’.

It is said that Amazon’s CEO – Jeff Bezos, spends a couple of days every year on the service desks to field customer feedback. Even better than that, send him an email and he’ll personally see to it that someone from Amazon responds to your query.

Industrial action is over, but trouble continues for US ports

US port closures

The first blog I wrote on Procurious was about McDonald’s horror year in 2014. One of many glaring supply chain issues for the fast food giant was its mismanagement of the industrial action that took place at ports on the US west coast in 2014.

This week something sparked me to go back and see where things had got to with regards to these disputes. What I found was interesting to say the least.

Busy making other plans

While dockworkers were negotiating new contract terms, causing work operations at the ports to grind to a near halt, it appears supplier chain managers across the world were busy formulating back up plans.

Despite longer transit times from the buoyant Asian markets and increased shipping cost, many supply chain managers elected to re-route shipments paths from their original west coast destinations to east coast ports (via the Panama Canal), or though neighbouring Mexico and Canada in order to avoid the rigmarole these disputes have caused.

Those involved in the west coast shipping industry surely would have cringed at stats released last week suggesting that, for the month of January, year-on-year cargo figures have dropped by 28 per cent at the port of Los Angeles. The port of Oakland estimated even greater losses with cargo volumes shrinking by 32 per cent for the month of January.

They’re not coming back

Perhaps the area of greatest concern for the west coast shipping industry is that these sorts of decisions tend to be sticky. Firms that have made a commitment to alternative shipping routes (largely through frustration) are unlikely to resort back to west coast ports now that the industrial action is over. This is exemplified in the findings of a survey released by the Journal of Commerce last week, which suggested that 65 per cent of shippers planned to move less cargo through west coast ports in 2016.

The importance of supply chain flexibility 

Supply chain flexibility means that firms are now less reliant on individual ports than ever before. Aside from fresh produce, most goods can ship from alternative destinations, meaning that supply chain managers now have more options around how they move their goods. Sure, it may take longer, but with proper planning, a steady, reliable supply can in fact be established, something that west coast ports failed to offer in 2014.

Speaking on the losses and challenges the industrial action has created for the Port of Los Angeles, the organisation’s executive director, Gene Seroka, stated: “About a third of our cargo is purely discretionary, some of that cargo has moved to other port complexes. It’s going to be extremely difficult to earn that business back.”

When the cat is away the mice will play

While west coast ports are seeing significantly lower traffic flows, there has been a corresponding up turn in activity on the east coast, with the Port of Virginia seeing a 15 per cent increase in cargo figures. It’s also thought that the planned expansion of the Panama canal will make east coast ports even more attractive options for goods coming or going to the lucrative Asian market. The expansion of the canal, despite numerous complications, is due for completion next year.

So, while the industrial action has stopped, it seems like the impact of these disputes are yet to have fully played out for the west coast’s shipping industry. Can they make up for lost time?