Don't mean to nit-pick but a few issues: 
 
First, no one had to file a tariff every time they got a new customer. They already had a tariff or tariffs, the only thing you had to do was file a new rate, if it was a new rate.  
 
Are tariffs cumbersome? Sure, but tell me, how do service providers keep track of prices to charge a customer without a price sheet of some kind? So if you still have to file your rules tariff, and somewhere in your company you have to have a price sheet for a customer, what changed? Oh, you don't have to file it with the FMC? Is that the big deal? 
 
Shakespear had it right.

Gary 
 
 
 
I seriously doubt any NVO ever followed the letter of the law and filed every time they got a new customer (with a new rate to a new destination is what I meant) The point i am making here is that the tariff rule was over burdensome and completely useless for all intents and purposes. Because in reality most customers of NVO's require new rates on average twice a month to each shipping lane, as rates not only constantly change whether the market is going up in peak season, or coming down in slow season, HOWEVER one has no choice to but to keep up with the competition. You fail to update your VIP clients and you can kiss them goodbye. 
 
 
 
I wish it were that simple that you could just publish a tariff and everybody uses it, like the airlines, but that is not reality in our industry.

Sorry, we are missing each others point. Mine was (1) no one filed a new tariff every time they got a new customer, at most they filed a tariff page (2) even if you stop filing at the FMC you still have to have a tarrif of some kind, otherwise how do you quote rates? bill customers? you have a price sheet or something to keep track of what you are doing, like any other business. So if you quote customer X $1500. per container today, where does that information go to, flow to. My point was that in order to run any business that is transactional in business you have to have a tariff or price sheet or some way of keeping track of what you are doing. Change them twice a month or twocie a day, you must keep track of it and that's all that a tariff was.

Gary 
 
 
 
I better understand your point, and I hope you dont think I am like the American Shipper and misquoting you. However I guess my response should have been that although this is true,you can run a company that keeps your customers somewhat "in a box" so that they all fall within certain perimeters, and therefor keep a tariff that is extensive and consistant. However in my 26 years of experience in this industry, 4 different Companies, I have never seen any NVO use the tariff to keep track of their quoted rates, simply because the rates change so often and have so many variables (one customer could have quotes from 5 different ports, to 8 different destinations, on 3 different commodities, with 4 different sizes of containers, plus LCL, using 4 different carriers with varied types of services), thus several different rates, that could change in 2 weeks or 1 month or so on due to the competition. It is virtually impossible to keep a tariff page on that type of customer. Then you multiply that by 100's of customers with their own varied specifics. YES NO ONE FILES A TARIFF FOR EVERY CUSTOMER, But if it is a new lane, or new rate to the same customer, you had to file. You couldnt just quote a new rate that didn't exist in your tariff, and that was my point. You take that fact with the fact that our Carriers keep changing our cost, thus driving the market one way or another, you dont have time to look up your tariff to requote anybody. The market drives the tariff, not the other way around. 
 
Maybe you know some NVO's that operate in this fashion, probably the big guys like EI, OEC, etc, because any company that has over 600 people just in their I.T. department can afford to have both systems in place and the manpower to keep a practical and useful tariff integrated with the market demand upon their sales force. However I still don't see it as practical for the average Joe. 
 
 
 
But you also bring up another point, and that is with today's software technology, there is probably a system that allows for this, I just havent found it, and probably couldn't afford it....yet. 
 
 
 

Appreciate everthing you say and understand; but you proved a point. You in essence quote rates and don't keep track of what you have quoted? so if the company you quoted to ships two weeks later, what do you charge them? If you have more than one office, are you competing with each other?  
 
Your pricing is a key to profitability and if you have no formalized way of tracking it, using it etc you have a real problem in truly managing your business (no you personally, anyone). Try Management Dynamics, pleanty of tools with a variety of price ranges.

Ok Gary, let me put it to you like this....say we have two salesmen, one in Atlanta, one in L.A., SALESMAN A in Atlanta quotes a Furniture Importer of say 20 boxes a month a rate of $3500/40 on CSAV to door, 35 days, and $3700/40 to door 28 days, but that same customer gets $100 lower the following week from APEX, and within 12 hours salesman A has to match the rates or lose the booking. There is not much thought going into that, no waiting for approval from mgmt, the salesman matches, adjusts the sell rate to everybody internally concerned, including the booking agent that operates on profit split, everybody is happy , we keep the acct. Meanwhile salesman B has another acct from the same port in China to Atlanta door, same commodity, except maybe they do 5 boxes a month and because they are smaller, they are under the radar, Apex isnt quoting them, and the sell rate stays higher, possibly even more than $100 higher, simply because he can, everybody is happy. In the meantime does a tariff need to be filed again for the first acct ? maybe so, maybe not., But was there a rate existing beforehand to reference to ? of course not, because the market is a reactionary market...the sales are subject to the demands of the market. (especially now during slow season, where rates literally change on a daily basis.) 
 
 
 
Now you mention MGMT DYNAMICS, I assume this is a software system designed for NVO's, I am not familiar with it...however how would it apply to this type of situation, which is a microcosm of what an average NVO deals with everyday ???

Devin 
 
NVO's are no different than VOCC's or trucking companies ot railroads when it comes to dealing with customers and pricing. Without some form of management over what goes on you give away money every day. That isn't to say that all pricing decisions have to be made by one person, it says that all pricing decisions have to be reviewed and some strategic thought must be given to how those decisions are made, and by whom. 
 
What you describe to me is well known, no one keeps track and I guarantee that money is being left on the table. If it is $100. a day,so what? If it's $10. a container ----?? 
 
Management Dynamics has systems for those who want to do contracts, tariffs, rating in an automated fashion and be able to produce reports tell you what you are doing. They are one of several companies who do it. Once up and running everyone in the company has access to the information, knows exactly what has been quoted to whom etc It can be done in a way that limits access if some contracts are those you need only a few people to know about. But it allows you to manage the pricing process and has added value in allowing automated rating and giving you periodic reports on exactly what you are doing with price, that thing that drives revenue, margins and profitability. 
 
I'm from the old school that says you can't manage what you don't meausre, and you can't measure anything you don't have somewhere all together to look at in a reasoned way and assess exactly what has been done and how it has affected you. It may be an issue of how much time, effort and money do you put into managing this - not knowing you or Universal, I would say think in terms of improving your margins by $25. a container. 
 
Good luck, the markets will be good, the carriers are doing crazy things again, kind of back to the nomal of say 2007. 
 
Gary

Gary 
 
 
 
All excellent points and suggestions, no dissagreements here. Except to point out that I am as well old school and tend to manage things personally rather than leaving it up to some automated system, because everything is virtually case by case. Although most cases are either handled correctly because our sales are well trained, or because we have a system of checks and balances there is no real problems, yes there are some points of confusion at times, where maybe two sales people are quoting the same customer two different rates. That rarely happens and only because one person is not following procedure. 
 
 
 
However I am very interested in this software, hopefully it isnt too cumbersome to implement or too expensive and I intend to look into it. Just google Management Dynamics ? 
 
 
 
If this improives our effeciency and profitability by any measure I will buy you a Hairy Crab dinner in Shanghai, deal ? 
 

Prefer seafood at Llama Island and can get Maersk to take us out there on their launch from either Hong Kong or Kowloon. 
 
Best of luck with whatever you do.

even better idea, will be in HK and Shanghai mid June

Hi Gary,  
referring to the markets will be good, the carriers are doing crazy things again, kind of back to the normal of say 2007." 
 
I would be interested to know what these crazy things you are referring to?  
Are you referring to the aggressive market expansion at the expense of lower freight rate? 
 
The substantial recovery of US job growth and spending power will bring great hope this year and hopeful next year.  
 
 
Gary, there are a number software applications in the market for sales and reporting. If you are looking for coverage across offices between states, regions and countries, your purchase will not come cheap. Apart of purchasing the software, you need to cater for: 
1. Hardware purchase (such as servers, servers-PC network, etc)  
 
2. Might need to pay for annual license fees for software usage  
 
3. Software Applications Systems  
maintenance and support & etc. 
 
Do your estimation well (the opportunity cost vs cost of buying) as getting good software applications might not come cheap.

Chris 
 
Ocean carrier pricing is not much different than any other business, prices are set by the market, freight moves at market prices. The market is heavily influenced by supply/demand ratios so when supply is much greater than the demand, prices fall. 
 
In 2009 carriers recognized that the supply/demand ratios were not in their favor and they began taking capacity out of the market by anchoring them in SIngaopre and Northern Europe. Over 550 containerships were at anchor for several months in 2010 making supply tight in some instances and rates rose; as opposed to losing $17. Billion collectively as they did in 2009, container carriers made a profit of about $8. to 10 Billion collectively in 2011. Global trade had grown about 12% in 2010, rates went up 25% or more. Now comes 2011, global trade grew in the first quarter by 10% but carriers have only 85 containerships anchored and new ships are being delivered weekly, so supply is now above demand again. And for 13 consecutive weeks, rates have gone down in major trades. No one can be sure but from early results, the container shipping companies will likely be in a loss position in 2011. A $100. per 40ft container average drop in rate costs the industry $6.8 Billion. 
 
Recognizing this market situation, why didn't the industry again limit capacity to protect the rate levels and enjoy the increased volumes? Because as an industry they do "crazy things", have done it for decades and the ocean floors are strewn with the skeletons of carriers having gone out of business. 
 
I agree with your view that there are numerous technological products that can help in the customer relations/sales areas. The NVO industry needs to have a  
 
method of simply keeping track of what they do and solutions of many types and kinds are out there.

Gary 
 
 
 
Excellent points.  
 
 
 
Also remember most of those Carriers that suffered losses in the billions in '09, that in a normal market would have been on the Ocean Floor (Hapaag Lloyd, CSAV, etc)had it not been for the fact that all or most of those Carriers were heavily subsidized by their respective governments. They seem to have a bottomless purse attached to them. (Unlike Sealand and APL that had the U.S. Govt finally say enough is enough and sold them off). That together with the ability for the Carriers to form the strategy of an Oligopily, or what I would call "legal" collusion or price fixing, has put this industry in quite a unique "market". Yes when demand is down and capacity is up, there is downward pressure on rates and yes I believe the Carriers will probably all end up in the red at years end, although nowhere like 2 years ago. But as we have seen, normal supply and demand curves don't really dictate this market like it would in a normal Free Enterprise market. 
 
 
 
My prediction: I think, believe it or not, the U.S. Economy will be the X factor and drive the market this year and cargo demand will go up because consumer confidence is driving people back to the Malls. However the real reason for that is the scary part, and once the American public wises up to the fraud our Government and the Federal Reserve is PERPETRATING against us with this false sense of prosperity driven by the "Quantitive Easing" and Stimlulus spending, the House of Cards will start to crumble. 
 
 
 
So while demand does increase this year, Capacity will far exceed, and we should see downward pressure all year at a controlled level. However, from an NVO's perspective, in the 3rd quarter we will all once again be left out in the cold to fight over our share of the pie, while the BCO's get preferential treatment of no GRI and no space problems, while we get squeezed with tight space (more for East Coast all water) and GRI plus PSS. Hop along for another ride on the "TP" Roller Coaster.  
 

Slight corrections: Sea-Land NEVER got subsidy, from the Government, they were relatively healthy financially and in the 1993-1997 time frame made nearly $1. Billion in profit, unheard of in those days as volumes were less than half of what they are today. CSX sold Sea-Land because of its own management failures in trying to buy the Penn Central Railroad and the impact that had on earnings as well as the stock price. 
 
APL was subsidized and indeed was sold because subsidies went away.  
 
Under conferences the carriers had the opportunity to make untold profits, but did not. They made money in 2010 because they had to or go out of business. 2011 is a year where agin they can make a big profit, but have taken actions to minimize profits and go again into the red. Last year for four plus months there were 550 containerships at anchor - this year maximum of 110 and today only 84, and new capacity is coming on. They put rate pressure on themselves with the only apparent reason for some to try and gain marketshare. Volumes will go up by 8 to 10% globally, so they could have easily again controlled the supply and either stabilized rates or take increases. They didn't and created a negative supply/demand ratio for themselves. 
 
Agin in 2011 like 2009, VOCC's will lose money and NVO's will make money.

Interesting, I remember Sealand always made money, but seem to remember hearing in the year or so before Maersk bought them that they were also getting subsidies.  

As Director of Regulatory Affairs for S/L for 4 1/2 years and as a Vice President of the company for 8 years, we never got direct operating subsidy as did APL, Lykes, PFEL, etc etc etc. We got access to US Flag impelled cargo - military, PL-480, etc but no subsidy. 
 
And when it dwindeled and went away in the late '80's and early 90', so did all of those lines. Some before that like PFEL, States Lines (sold to Lykes who then sold to CP Ships)

Hmmmm, was S/L in the black still when Maersk bought them ? 
 
Its a shame we still don't have them around as a US flag Carrier. Maersk service has never been able to come back to that level of service.

Great points gentleman and spot on, on the market trends on rate.  
 
Looks like the carriers never learn their lesson even though the 2009 crisis almost kill them. 
 
Anyway, just saw the APL release period 2 operational update:  
 
YTD volume is $534,300(FEU),  
8% up compared to previous year 
 
Average Revenue Per FEU is $2,616 
6% up compared to previous year 
 
Looks like they might be in the red for this quarter. 
 
Likelihood that the same will apply to the rest of the carriers.