Its been 7 months since I started to live in the place where I once involved in creating the sea-air products for many companies and customers. I thought it would be wonderful to live in Dubai and still promote the sea-air product. Its still the case , however when you are close to the operation, you tend to see things more microscopic than macro level. I am a firm believer in the multi modal product. I think people who use this product are real out-of-the-box thinking supply chain managers.
The sea-air product has not evolved so much from the history of 2-3 decades . The good old companies who are doing sea-air have done the same. I felt like after creating BAX Global and Schenker sea-air product when I was in Shanghai , followed by Kerry Logistics and Agility, few new kids in the industry have taken things aggressively to see the benefits of sea-air.I like that as it has spread the word around. However is there anyone doing anything to explore better options , innovative ways of producing the next generation sea-air product ? no I guess .
The consumer world has drifted far away from the good old supply chain habits . When we had 2-3 seasons of peak demand , now it has become 3-5 with sharp spikes of demand. carriers and providers alike , cannot plan anything as the market is so dynamic . Rates have fallen resulting in low volumes of sea-air. How do you revive the sea-air market and demand ? thats the difference between people who lead the product innovations and people who follow other's effort and success .
I have been a bit taken back by the developments in Dubai , specially with the changes of transshipment process. I am not too sure if Dubai government is consciously making things difficult for sea-air transhipments or someone is not thinking far enough on the after effects of their decisions . The recent decisions to increase the Terminal Handling Charges (THC) at DXB airport and restrictions of customs clearance process for mix loaded containers for sea-air , are like Dubai saying "we dont want sea-air anymore".But if you look at the GDP contribution of transshipments and supply chain activities for Dubai , it represents a double digit number . Isn't that good enough to protect this product ? Dubai policy makers need to seriously think what to do and how to improve Dubai as a capacity and cost leadership in the multi modal transport industry. Since the rates from Asia to Europe and US have fallen , Dubai government should take measures to reduce cost and offer seamless transshipment processes for sea-air in order to protect and sustain the volumes. Otherwise the lack of options will deter sea-air customers to look for options like rail from Asia to Europe which is happening now.
Sea-air is becoming commoditised due to lack of innovation. For some companies who have started to do sea-air by copying other's success is considering reducing rates, is the only innovation. thats pathetic and destroying the market for a good sea-air option.
I have always predicted the next best sea-air hub is Colombo, Sri Lanka. Thats not because I am Sri Lankan but it makes a lot of sense when you look at lead time compression . But unfortunately , the country does not have a strategy and not interested in one either .
let me give you an idea in my next blog about the specific changes in Dubai in terms or cost increases and processes becoming complicated . I need to find time to write too. thanks /Chaminda Gunasekera , follow me on Twitter #ChamindaG1 or LinkedIn.
