Friday, 28 June 2013

Incoterms 2010 / Terms of sale - insight into the basics

Good afternoon

Here's the first of our posts on topics which are useful and important for both our existing and future customers.

If you trade internationally, the Incoterms rules are a common language which, from a transportation perspective, clearly define the tasks, costs and risks involved in the movement of the goods. This is vitally important as it makes it clear who is responsible for the costs involved in physically getting the goods from shipper to consignee.

It may be that the consignee bears all transportation costs (Ex Works/ EXW) or at the other extreme, the shipper bears all costs (Delivered Duty Paid/DDP). More often it's something in between, where the seller/consignor and buyer/consignee pay a clearly defined part of the costs involved in moving the shipment from door to door (for example CFR). 

Crucially, it also defines at what point risk passes from seller to buyer, which is critical as often there's a misunderstanding and often goods are not fully insured, save the woefully inadequate standard liability provided by shipping lines which isn't sufficient in 90% of cases. Airlines offer more generous standard liability cover but if you have higher value goods, you really should consider your own marine insurance policy which means you won;t get any nasty financial shocks if your shipments are either lost or damaged.

Back to Incoterms 2010.

These terms are denoted by three letter codes such as EXW, DAP, FCA etc and in some cases they need to be supplemented with a place to denote exactly when delivery has taken place. In this context, delivery doesn't always mean delivery in the general sense (ie delivery to your factory or warehouse), it refers to the point when the seller has fulfilled his obligations under the contract. It could therefore be that "delivery" is effected when the goods pass over the ships rail at origin (under terms FOB).

The risk part is a grey area for many customers and, for example, they might reasonably assume that if the Shanghai supplier sends the goods CFR Felixstowe where they organise transport and pay for ocean freight to arrival Felixstowe that they would also carry the risk until the container has passed over the ships rail (ie Terminal Handling Charges, Customs Clearance, Delivery etc). Not the case, the risk passes once the container has been loaded onto the vessel at SHA.

In the latest edition, Incoterms 2010 (which were published in 2011), the number of different Incoterms was reduced from 13 to 11 along with a clearer and simpler definition of the rules.

Many of you will have heard some common Incoterms such as FOB (Free On Board) and Ex Works mentioned by colleagues who deal with international suppliers or customers, and often by your freight forwarders.

Couriers or FPOs (Fast Parcel Operators) such as DHL, UPS rarely mention the Incoterms, they're more likely to use general terms such as door to door or give detail on the service levels, next day, time critical etc and they're often very export driven and not flexible enough to apportion some costs to the shipper and some to the consignee as is the case with many Incoterms.

More later...

Thursday, 27 June 2013

How the phoenix rose from the ashes....

Whilst my wife and I were in New Zealand and Australia in Nov-Dec 2009, I sketched out the business model for Straightforward Consultancy. We would focus on the small-medium sized customers in the North West and use our industry expertise, knowledge of the market and the freight forwarder business model to sharpen up customers' import and export freight models. We would also be available on a typical consultancy basis to help clients with their freight and Customs related problems.

I suppose the concern was that this was an idea, completely untested, and although I knew that there were consultancy businesses in the logistics sector, my vision for SCL was for something very niche and also one which was going to not only help customers to reduce cost, it would also walk alongside them on their logistics journey, a day to day source of advice and operational support.

In Sep-2009, I'd done some test tele-marketing to clients in the North West and talked about our business proposition and whether they'd be interested in our services. The results were pretty interesting, quite a few customers in my sample test marketing (say half) were quite interested, they thought an industry insider with a lot of experience might indeed by an asset, but they wanted to know how the fees worked.

Of course, in 2009, we were in the early stages of an economic recession and customers were very concerned about costs. There was also a reluctance to take on consultants as many customers felt they would be expensive and they couldnt be sure of the results - an uncertain return on investment (ROI).

So, in New Zealand, I was doing a lot of thinking about how we could make the value proposition attractive for small-medium sized customers. I knew there would be an interest in reducing freight costs but having said that, it would probably have to be results based.

Fast forward to February-10 and we had (almost) everything in place. We had a (basic) website, email address, business cards, a limited company, an accountant and visibility on LinkedIn. I also had access to a database of regular importers. I was also totally determined that it would be a success, for me it was like the phoenix rising from the ashes after all that had happened in 2009.

We focused on importers to begin with as it is generally accepted that around 75-80% of worldwide air and ocean freight is consignee controlled (Incoterms Ex Works (EXW) or Free On Board (FOB) and they would pay any freight costs. They'd therefore have an interest in reducing and controlling their landed costs so in Mar-10 I started calling companies in the North West using a post code based system (as we wanted to be physically close to our customers, able to see them regularly to advise and support them).

Then the question of fees started coming up in conversations. The customer would express interest in our service and then ask how our fees worked. I'd initially hoped that companies would be happy to pay a standard consultancy type day rate but it was clear this was an issue. To make it attractive, it would have to be results based, some sort of gain share / shared savings model.

This way we'd be paid on results and the client would see nett cash savings on their bottom line alongside any service improvements we'd introduced as a result of our logistics / freight review.

This then meant we'd have to design some rigorous processes and robust measurement tools to clearly and accurately measure the savings, shipment by shipment. That was when I decided to sign up for an advanced IT course at Warrington Business School to design the tools we'd use to carry out the bid process and also generate our monthly savings and freight activity reports.

Luckily I was able to take advantage of a 100% grant and I embarked on the course for a year. It was really excellent and I was provided with 1-1 tutoring.

More tomorrow.

Monday, 24 June 2013

China manufacturing shrinking according to Bloomberg report

Interesting report here - this may have an impact on the ability of shipping lines to implement their General Rate Increases (GRIs) in Jul 2013. Clearly there's a connection between a weak Eurozone and a weakening of Chinese manufacturing output.

Our first customer - Manchester Grammar School - continued

So, back to Manchester Grammar School. I really enjoyed working at the school and meeting a completely different group of people. I started at 0800 each day and worked until 1530 (when the school day finished) however I often worked later, mainly because I really enjoyed the role and also because our department was a service provider and it was key that we didn't let anyone down, all part of the partnership we built between the teachers and our department.

I also reviewed the trip application processes and started to push back, letting the teachers know that we needed a minimum of 48 hours notice of any trips, explaining that when this was observed, we could run more efficiently and avoid any last minute panics. There's nothing more frustrating than not being in control, especially when you're trying to provide a service and this reinforcement of the notice period allowed our department to breathe, and also gave us time to work on the department, instead of just working in it.I worked at the school for 6 weeks and only had to leave as my wife and I had decided to put the months of stress and worry behind us (linked to the DHL redundancy process and the appeal I made) and booked a holiday of a lifetime, 6 weeks in New Zealand and Australia.

Before that, the school needed to seek a permanent person to run the department after I had left and I was very flattered to be involved in the recruitment process, where I spent 15 minutes with each candidate after their formal interview. It was really quite remarkable as we both selected the same candidate even though we'd met them separately.

The day I left, Jim Mangnall and Eric Cittanova made a presentation to me to thank me for the work I'd done and I later received very complimentary testimonials from both Stuart Leeming and Jim Mangnall which are shown below.Testimonial from Jim Mangnall below

Re: Andy Cliff

Andy joined MGS for most of the Michaelmas term of 2009 to carry out two roles.

He worked as our visits assistant, providing a wide range of back up to tens of offsite school visits home and abroad.

While doing this we requested that he provide us with some analysis and consulting about the process, roles and challenges as a basis for future development in the role.

We were absolutely delighted by all the work that he did. He very quickly formed easy and valued working relations with a large proportion of the staff, both teaching and non teaching and commanded their respect – they all valued his help.

Andy is very clear thinking, well prioritised, analytical and imaginative.  He very quickly got to the heart if the issues that troubled us and rapidly put in a largely computer based system to address them, which has all proved to be effective.

He quickly adapted to the very different style and priorities in a school as opposed to a business.  Indeed, it was very pleasing to note how Andy embraced and valued the philosophies of the school and took a keen interest in school life, supporting various functions.  It was also notable that he worked way beyond his allotted hours and showed huge commitment.  I should add that this extra time in no way reflected any lack of speed in his work or time management both of which are formidable.

I believe I am right in saying that the report Andy wrote, at the conclusion of his time with us was his first involvement in such a document.  It was undoubtedly one of the clearest, most articulate, perceptive and wise documents of its type that I have read in a very long time and showed great professionalism.

When Andy’s time with us came to an end as arranged, we were all sad to see him go, he had become a part of the team in a short time and we enjoyed his company and the sense of fun and enthusiasm that he brought.

We have been glad to see Andy socially since he left the School.

Yours faithfully

Jim Mangnall

Surmaster & Head of Co-curriculum
Testimonial from Stuart Leeming below

Andy Cliff – Straightforward Consultancy

The Manchester Grammar School prides itself on its very active co-curricular programme which makes considerable demands on our logistical planning.  As well as managing a disparate transport operation incorporating our own services and those of third party providers, regulatory demands in these risk-averse times are considerable.
For some years, our Trips Office had been operating under increasing stress and the staff turn over had been higher than we were comfortable with.  During the Michaelmas Term 2009 (September through December) we decided we needed an independent assessment of our systems and personnel, especially as we had the opportunity for change when yet another trips administrator gave notice of leaving.  Andy Cliff was thus engaged to work within the Office to assess how we were operating and to advise both about potential changes to systems and to define the job description for and help appoint the replacement Trips Administrator.
Andy quickly developed first rate working relationships with everyone he had contact with.  The significance of this cannot be over stated.  We were very impressed with his analytical skills; his ability to quickly assimilate unfamiliar systems and to incisively identify short-comings and stress points, but also to recognise strengths.  His final report was clear and concise, and it identified specified mechanistic solutions.  We were able with confidence to implement key recommendations, changing elements of procedure (often simplifying them) and appointing the right person to the Administrator post.  In his report, Andy indicated areas that would benefit from longer term attention too and we continue to work on these.
Six months on, the Trips Office is a calm and stable place; testimony to the quality and validity of the advice we received.  Those who worked alongside Andy during his brief period with us continue to speak highly of him and some keep in touch with him.  I would not hesitate to use the services of Andy Cliff in the future.
Stuart Leeming
Deputy High Master

Sunday, 23 June 2013

Our first customer - Manchester Grammar School

It is quite bizarre that although Straightforward Consultancy was going to focus on helping small-medium sized customers with their import and export challenges, that our first client was Manchester Grammar School This school has an impressive history - it was formed in 1515, yes almost 500 years ago, and of course in 2015 they will celebrate 500 years as a private boys school.

Arriving there for the first time was a little daunting in some respects. I was (I believed) completely out of my depth, surrounded by highly educated academics and an organisation I was totally unfamiliar with.

Stuart introduced me to two very key managers at the school. Eric Cittanova and Jim Mangnall. Eric was the Educational Visits Coordinator (which is a highly responsible position). Eric was personally accountable for the school's actions in relation to Health & Safety for all the boys who took part in Educational Visits, whether this involved a short coach trip to the theatre, or a trip to the Atlas Mountains in Morocco (both of which were real trips). Jim Mangnall was their Surmaster and Head of Co-Curriculum.

They introduced me to my new colleagues in the administration department of which the Educational Visits team was a part. It was all very new and there was of course a lot of take in. But at the same time, it was completely different, interesting and I could see that even though this was very different to my former role at DHL, it was about two key things - people and processes. Because we were in effect a support mechanism to the teachers, who would be the ones leading a trip, they were our internal customers but it seemed as though we were quite a way apart and the Visits Department was seen as bit of an obstacle in some ways. The teachers just wanted to lead the trip with as little hassle as possible (quite understandable because they were taking ownership of these trips in addition to their core teaching roles) but my department had to ensure that the School fulfilled all of its legal and duty of care responsibilities so we were striking a balance here.

One thing I decided very early on was that even though my department was there to support the teachers in their execution of the educational visits, that they also needed to understand our limitations and that we needed sufficient time to process and approve their trip. I therefore decided to enter their hallowed territory, the common room. This was where teachers had their elevenses and lunch, and some non academics didnt feel comfortable entering this room. I decided that I would
go their every day at 1100 for morning tea and biscuits and set about developing relationships with the teachers, many of whom used my department for their UK or overseas trips applications and approvals.

This turned out to be a master stroke, mainly because it created a relationship, but more importantly I was able to explain what we needed from them to help us provide them with a better service. In effect I created a bridge between our non-academic department and the teachers/academics by meeting them on their home territory, and this had a great impact on our partnership. They now understood what our challenges were, and that we wanted to do our very best for them - but to do that, they had to meet us half way.

More tomorrow.

Friday, 21 June 2013

DHL Global Forwarding detox & Manchester Grammar School

Good afternoon All

In my last blog post, I talked about the lightbulb moment and the idea of the company name. I set up Straightforward Consultancy as a limited company on 4th September 2009 and secured web addresses for and

It's almost 4 years ago now so I can't remember the exact timelines but I do remember creating our first basic 3 page website and then putting my toe in the water and going to a local business networking meeting in Lymm, I think it was a South Warrington Business Forum. I'd received some excellent business start up advice from Business Link, a government funded body who were there to help people with start up businesses and they'd helped educate me on what was involved in starting your own business, whether to be a Sole Trader or Limited Company, and lots of other things such as seeking out an accountant etc.

Anyway, it was quite a special moment, talking to other attendees of the networking event and talking about my business for the very first time, after 30 years of working for logistics/forwarding companies as an employee. I got home later on and my wife Diane told me that one of our neighbours, Stuart Leeming had popped round whilst I was out and wanted to discuss an opportunity with me. He'd only just heard about my redundancy with DHL and thought he could possibly help me out short term with a job opportunity. Stuart was the Deputy High Master of Manchester Grammar School, a very prestigious private school and we'd been neighbours for around 9 years.

The next morning, I went over to see him to find out about the job opportunity - I was a little curious as I couldn't imagine them needing anyone with my international freight forwarding or Customs experience but it all became clear. Stuart told me that they had a very active Educational Visits Department which coordinated all the extra curricular activities for their students (say an overseas ski trip or a trekking expedition to Morocco) and their trips coordinator had just left. Although they intended to replace this person, Stuart thought it might be a great opportunity to inject some external commercial expertise into what was of course an academic organisation. I told Stuart from the off that I wasnt sure that I would be a good fit because I had no experience of schools, minibuses, health and safety and all the other things that made the department tick.

Stuart said he thought I would be ideal, he had known me for nine years and we'd had plenty of chats over the gatepost so to speak and he thought my core and interpersonal skills were very transferable into their environment. I explained that I had just launched Straightforward and so I could offer my services on a consultancy basis. I made the proposal the same day and it was accepted.

Our very first customer was Manchester Grammar School!

Thursday, 20 June 2013

Asia to UK ocean container rate increases less than 2 weeks away - are you prepared?

Here's a piece I posted on LinkedIn yesterday, quite relevant if you're an Asia importer. I have a lot of contacts in the forwarding sector and have our ear close to the ground on this one (as always!).

Major ocean freight rate increases from Asia to UK just 2 weeks away - are you prepared?

For those of you who import product from Asia, hopefully you’re aware of the huge rate increases planned for July 1st, just 2 weeks from now.

The question is, where are you now in terms of your inbound freight costs and have you arranged to have as much product on the water from Asia by June 30th? Have your rates and landed costs been following the market on the way down for the past 3-4 months and do you have a strategy to limit the impact of any GRIs(General Rate Increases)?

We’re now in the run up to peak season on Asia-Europe, when volumes will firm up, space will become tighter and your landed costs could rapidly escalate.

We’re actively managing a portfolio of ocean (and air) freight traffic on behalf of our UK customer base and monitor the market daily.
If you are concerned about the impact of these increases, which will effectively add up to USD 2000 to the freight cost of a 40 foot container from Asia to say Felixstowe, then please do contact us.
We’re expert in this area and use our market knowledge and collective bargaining power to ensure our customers’ freight costs are kept competitive and under control.

I’m happy to speak with any companies in this group with concerns and who wish to find a way to reduce their air or ocean freight costs and find a way to better manage their freight and Customs activity.

Kind Regards

Andy Cliff
Straightforward Consultancy

Tel : 07934 443492
Email :
Web :
Twitter: @AndyCliffSCL


Introduction continued - necessity is the mother of invention....

Good afternoon All

In my last post, I said I'd talk about how SCL (Straightforward Consultancy) came to life, so here we go.

It must have been mid-August 2009 and my wife and I had taken our touring caravan for a week's holiday in Southport. At this point I was on what's called garden leave, and I was required to stay at home and have no contact with my staff/colleagues or customers for the entire redundancy process from April 2009 onwards.

The job hunting wasn't going well and all of the time spent challenging the redundancy had been very tough. It seemed that pretty much every day since early May, I'd either been in contact with DHL Global Forwarding's HR department or my employment lawyer. Although as I'd said earlier, even though the appeal against my redundancy was probably going to end in my leaving the company, I felt it was a poor business decision and I would challenge it every step of the way. This took its toll on me and so this holiday was a great boost, just getting away from the negativity of the redundancy process and a time to relax and indulge in some free thinking.

I remember this part quite well now I come to think about it. I was outside the caravan in the sunshine with a sketch pad and was wondering how I could possibly offer my expertise to UK importers and exporters and help them to reduce freight or duty costs, solve logistics problems and guide them through the logistics maze.

It's fair to say that many small-medium sized companies (SMCs) find it difficult to communicate with or understand freight forwarders and the industry terms (EXW, SSC, BAF, Value For Customs, Demurrage, Free Time, FSC...I could go on). As a result of this, they are not in the best position to negotiate with freight forwarders, and even if they did decide to go out to bid, they might not pick the most appropriate forwarder to quote on their business.

Most likely they'd contact forwarders whose sales people had popped in in the past few months and call them. Truth was that many companies of this size didnt have in house expertise and this was the best they could do. 

They would then ask these forwarders to quote on their traffic and they'd get a range of different quotations, all of them pretty much impossible to compare on a like for like basis (service/price/routing/transit time etc). 

So I thought that this had to be worth exploring, and more than that, one thing I really enjoyed from both my operational and regional sales roles was working closely with customers and establishing a long term partnership with them.

Furthermore, when I'd worked at Burlington Air Express, Kuehne & Nagel or Danzas/DHL, I could of course only offer our own services/pricing and of course our goal was to focus on our own company's development.

At the same time, I learned a great deal about our competitors, how the freight forwarder's business model actually worked and how we made money on either air or ocean freight forwarding.

This put me in a very good position as I had an opportunity to not only create a company with a great value proposition, I would be able to be totally objective, unbiased and neutral, seeking out the best freight solutions for my customers and managing their business for them. I'd also be able to communicate with freight forwarders in their language (which they do appreciate) and striving to build relationships with freight forwarders who shared my values in terms of customers, quality, responsiveness, service reliability etc.

So, back to Southport and the sunny afternoon and the sketchpad - and the company name. I remember many people over the years describing me as a pretty straight talking person and the fact that I would always be open and honest with my customers. We'd would be involved in freight forwarding and so Straight and Forward came together!

More tomorrow

Tuesday, 18 June 2013

Introduction continued - necessity is the mother of invention....

Good afternoon All

So, in my last blog, I'd taken you up to the point where I had been made redundant from my General Manager, Trade Lane Management position at DHL Global Forwarding (UK) and I now had to seek out a new role to keep paying the bills, but equally, to carry on doing what I really enjoyed and using all the experience I'd amassed in my various operational, sales and management roles in freight forwarding / logistics since 1979.

I was notified of my redundancy in late April 2009, and it was a big shock after 13 years with the company, but I soon realised that this was the start of a process which would most likely end up in my leaving DHL, regardless of any appeal I might make.

I therefore needed to then start searching for a new role in the industry, so my first approach was to talk to an executive search agency, Antal which I'd found to be very professional during my time at DHL. As I'd employed several people over the years using agencies, I'd not always been that impressed with the quality of the candidates they'd provided - it just seemed to be that we'd be sent 4-5 basic CVs, few of which matched up to the skills and experience we were looking for - and for this they'd expect a success fee of 15-20% of year 1 salary.

Anyway, Antal reached out to their contacts in the forwarding/logistics sector however we were of course in a deepening recession and most forwarders weren't taking people on, they were actually letting them go, so clearly not a good time to find a similar role.

They did however secure me an interview at DSV Air & Sea with their sales director, and we had a good meeting at the Radisson Hotel at Manchester Airport. He was impressed with my experience and achievements but after discussing with his MD, he said that they saw me more in a regional or global sales or management role but they were also not taking anyone on at that time in these areas.

In the meantime, as opportunities had been so few and far between, I started to realise that securing not just the right role, but any role was going to be very tough. I could of course go back to the bottom of the ladder and start in regional sales where there were more roles but I really felt that this could be a big mistake, as I would lose the skills I'd been using to great effect at DHL and I might become trapped.

I therefore made a decision that although it would be harder, that I would seek out a role that would be a good match for my skills and experience.

By July, the redundancy appeal process with DHL had come to an end and my appeal had failed however I was really very fortunate in two ways.

One, I had access to an excellent employment lawyer via my home insurance (always tick the legal cover box when you renew your insurance, it might come in very handy one day!). This lawyer guided and supported me through the process and was able to communicate with DHL's HR department using their terminology.

And two, as part of the redundancy process, I was able to have a DHL colleague present in the meetings with HR to support me. This was our Manchester Airport Branch Manager, Simon Power whom I'd known for many years and I really appreciated his support during the process. Simon was well respected in DHL and although it was probably quite awkward politically for him to be my support person, he was a great help in tough times.

I had a 3 month notice period at DHL and so after the failure of my redundancy appeal, I was advised that my employment would terminate on October 9th, 2009 and I hadnt yet found a job.

This was when I started thinking about the amount of knowledge and expertise I had accrued over time, not just my sales, operational and management experience but my knowledge of the market and the competition. That knowledge clearly had some value but how could I find a way to use that to generate income?

One thing I had always been passionate about were the small-medium sized clients (clients with annual freight spends between say GBP 50K and GBP 500K) and that they often had a lower profile as customers. As a result they often got mediocre service - and to make things worse, often didnt enjoy competitive freight rates either.

I remember from my long career in sales that there were many occasions when I would have to get personally involved as account manager when one of my clients had a service issue or just didnt feel they were getting the attention and service they expected, so there was clearly an opportunity to improve things here.

This was the lightbulb moment and when I started to literally sketch out the value proposition for Straightforward Consultancy. More tomorrow..

Monday, 17 June 2013

Introduction continued - the merger with Exel and DHL Global Forwarding

OK, I think we're almost done on my career journey. Things continued to go well for me at DGF both personally and for my team however it wasn't until 2007 that DGF appointed a new sales director. This meant that Geoff Corpe, our CEO for the UK had managed the sales team for about a year and I'd say he did a very good job and even though he was from the Exel side, he was totally fair and neutral with all the sales team, regardless of their heritage.

Our new sales director joined in 2007 and his role was to lead the UK sales team and deliver on the UK's country sales and trade lane budgets. We saw some reorganisation, such as the restructuring of regional sales and creation of sales hunter (new business) and sales farmer (account maintenance) roles however in truth I think what we needed (which we had at the old Danzas Northern regional sales team) was people who could both win new business and develop/maintain existing customers. These people are out there but they are highly sought after and well paid and I think they wanted to keep a tight control of costs. For me I'd rather have 2-3 top class sales people than a hunter / farmer structure because often the farmers aren't that motivated, just managing existing and being passed recent wins by the hunters. The hunters are also under lots of pressure as it can often take 9 months to win a new customer from day 1 contact and they're also not very productive, having to only focus on new business so travelling across the farmer's areas so 2-3 calls a day would be a good average.

In 2008, we saw a big drop in business as the recession began to really bite and customer activity overall reduced as the UK and world economies contracted rapidly. This led to a reorganisation at DHL Global Forwarding and sadly, my role as General Manager, Trade Lane Development was selected for redundancy, the thinking being that my team of 13 would report directly to the sales director.

You can imagine that this was a shock, not so much the prospect of redundancy, but the fact that we as a team were doing well against our KPIs and the concern that the direct report to the sales director would not be that effective (it is generally accepted that a manager shouldnt have more than 7 direct reports to a structure / team be effective). I did of course apppeal/challenge the redundancy however this was a business decision and my appeal wasn't successful.

I then had a problem - one, I was redundant and two, I had to try and find a new job right in the middle of one of the worst recessions since the 1930s.

More tomorrow...

Friday, 14 June 2013

Introduction continued - the merger with Exel and DHL Global Forwarding

Good morning All

So, to carry on from my last post about DHL Global Forwarding (DGF), the new company was now the largest freight forwarder in the world and although that was a pretty impressive sales line along with the DHL brand identity, customers have widely differing opinions on large organisations and how good they are at actually delivering what they promise - and whether they're able to be personal and attentive, particularly towards the small-medium sized customers.

Often, large corporate accounts or multi-national customers will have dedicated operational teams assigned to them to ensure that all of that client's very specific requirements and KPIs are  consistently met). The remaining customers are handled by the normal branch import and export operational teams, and the service they receive can vary widely, depending on the company culture, amount of resources in operations and also the IT and systems in place which the operational staff have at their disposal.
We went through the usual integration challenges in terms of differing cultures, staff sometimes leaving or people moving around within the company and my team had it's share of that. I did however manage to convince management that with a team of 13 people, we needed admin support and so we took someone on and this was a real help, as managing 13 people in itself was a challenge, never mind the paperwork/reports etc.

The UK team was highly regarded as I'd already designed a Selling Guide in 2002 (the UK-USA Selling Guide) which we'd evolved to cover all lanes in the UK team and won recognition for this from our HQ in Basel it was then rolled out across the entire Trade Lane network globally. The reason I did this was because it was our job to develop business across the country pairs (say UK-Singapore) however when sales people in foreign countries had opportunities and needed to offer rates and services, there was no clear go to or authority on rates and services so we loaded the Selling Guides with market leading rates and full info on our air and LCL services, this meant no matter who had an opportunity, they could confidently sell the UK and stand a far better chance of winning the business.

I used to attend regional Trade Lane summits each year along with my respective Trade Lane Managers with the three other DHL regions (North America/Latin America, Asia-Pacific and Emerging Markets (Africa and Middle East). This was where we set our annual budgets and came up with initiatives to drive the growth of the lanes.

I'll add more next week.

Wednesday, 12 June 2013

Container ship operators realise lower rates are here to stay

Good afternoon All

Having watched the UK and EU freight markets ride another rollercoaster on rates between Mar-12 and Jun-13 (USD 500/TEU to 1800/TEU and back down to USD 550/TEU today), and having also witnessed their failed attempts to prevent a slide in rates since January-13, it's clear that the lines fully understand that if true competition and a marketplace exists on Asia-Europe that they can't keep complaining that are losing money at current rate levels and therefore must implement ridiculous GRIs (most have posted a GRI of USD 900-1000/TEU, that's a USD 2000 increase on a 40ft box, so that'd be USD 3000/40ft).

The truth is that in a properly functioning market, the rate level is driven by a combination of supply and demand and that's healthy. What's been happening in the last 12 months or so is that vessel owners such as Maersk have been introducing or ordering mega-container ships (post Panamax) which can carry up to 18,000TEU and are more fuel efficient too.

So, actually they do get it - they need to reduce their lift cost per TEU via larger ships and better planning and organisation and become leaner. The smaller ships will then be sidelined to smaller lanes with the mega vessels occupying the 2 largest trade lanes - Asia-Europe and Asia-US.

All the bluster at the moment with USD 1000/TEU GRIs is a (vain) attempt to halt the slide in rates just a month or so longer until Asia-Europe peak season starts and then vessels will be fuller and rates will firm up.

Tuesday, 11 June 2013

Introduction continued - the merger with Exel and DHL Global Forwarding

Good morning all

Seems the UK summer has disappeared today with rain forecast for the next few days. Mind you we did have about 3 weeks of dry weather - only problem is that I'm going away this weekend on my bike (Suzuki GSXR750) to a motorcycle rally in Ashbourne, Derbyshire and I'm camping - perfect timing.

Anyway, back to the world of logistics. As I mentioned in my last post, things had been going really well at DHL Danzas Air & Ocean and we'd got the best of both worlds - we had the cache of the DHL brand name and we were still highly regarded in the market as a freight forwarder because of the Danzas name and heritage.

In late 2005, we got a major shock - Deutsche Post were in talks to purchase Exel Logistics, the world's largest contract logistics provider. Exel had a very strong brand and was the market leader in contract logistics. They also had a freight forwarding arm which had some blue chip clients such as Astra Zeneca so this was going to be another big merger. Frankly, most of my colleagues at the new Danzas AEI had only just recovered from the Danzas and Air Express International merger - and we also felt that it was going to interrupt the rise of DHL Danzas Air & Ocean whilst we digested another large company. I recall one of my directors once saying that in a merger, with all the disruption of staff and departments (and people leaving for other forwarders) the board expected to lose 15-20 of their customers. That really does seem crazy but I suppose, taking the long term view, the prize of a broader and better value proposition outweighed the cost of lost goodwill and lost customers.

Mergers are really quite tough, especially if you're in a sales role, and this is because the sales person tends to be the one who has the strongest relationship with the client and also the one who takes the flak if service dips or other issues arise which impact or frustrate the customer. At the very same time, you're still expected to go out there and win new customers when you know that your operational departments are being challenged by issues related to the integration eg lack of resources or the adoption of new operational procedures or systems.

So it was tough, and since my promotion to the Head of Trade Lane Development role, I'd opted to retain around 10 of my regional customers (from my Danzas Regional Sales Manager days in 1999-2000). I did this because it was my way of staying connected to the UK market, what our customers wanted and what the competition was doing. This gave me credibility with my team and it meant I was literally also out in the trenches with them in more ways than one. I always value my personal customers and I suppose that harks back to when I was the import manager at BAX Global (now DB Schenker by the way) or in regional sales for seven years at Kuehne & Nagel. If you're good at what you do, you can really enhance the customer experience and often gain more business from a client based on your commitment to them, and not just seeing clients as a means to earn a bonus or commission. My motto is that if you focus on the customer, and are willing to "get your hands dirty" when problems arise (which may not be your fault) that this builds trememdous loyalty and this is the very same principle I have kept at the heart of Straightforward Consultancy - going the extra mile for the customer, day in, day out. We've retained all of our logistics customers since we launched in 2010 so this is something I'm really proud of. Our customers clearly feel that we are genuinely adding value for them to renew their partnership with us each year. I'll talk about some of those customers as the blog evolves.

So, back to the Exel merger. Well, we learned pretty quickly that Exel's freight forwarding (Exel Freight Management) business in the UK was very export air dominated (as was Air Express International) whereas the Danzas business was import driven. There was a reason for this. Both AEI and Exel were very focused on MNC (multi-national customers) whereas Danzas was generally focused on SME (small-medium sized customers).

It is generally accepted that 70% of worldwide import traffic is consignee controlled (so 30% of export traffic is shipper controlled). This is why many UK forwarders have a fairly large regional sales force, visiting mainly import clients in the various UK regions where business is open to negotiation year round (no contracts as with MNC clients) and this sales model still exists today across pretty much every freight forwarder, certainly in the UK.

The Exel merger was, once again, a challenge but there was one good thing, which was that Geoff Corpe, the former Exel Freight Management MD was appointed as the UK MD of the combined business. I had to go for interview and effectively re-apply for the role of Head of Trade Lane Development but I was still very oassionate about what we were doing in the UK Trade Lane Management Team and in the intervview talked about how I had brought innovation to the trade lane initiative since I joined in Sept 2000. I'd also been part of a Global trade lane think tank formed by Eric Pilling, our Global Sales Head along with 3-4 other prominent trade lane heads from North America, Latin America, Europe and Asia which clearly helped and I was appointed to a new role, a little more senior I suppose. General Manager Trade Lane Development. Talking a little more about Geoff Corpe, who I reported to directly for about a year or so (we had no Sales Director at that point) he was very supportive, totally neutral with the Exel and Danzas staff and always contactable. A pleasure to work for.

In April 2006, the new company, DHL Global Forwarding (UK) was formed and my team had become even larger, as it was decided to expand the team as opposed to making redundancies. At that point I recall my team had become around 13 people. More about DHL Global Forwarding (DGF) next time.

Monday, 10 June 2013

Asia-Europe Full Container (FCL) rates - our piece to be in Lloyds/IFW !

Our letter from Friday in an earlier post will be published in tomorrow's Lloyds / IFW on line logistics newspaper - glad to get the true picture out to the wider marketplace!

Introduction continued - DHL Danzas Air & Ocean and DHL Global Forwarding

Good morning All

This is turning out to be a lengthy introduction but having said that, my career in logistics did begin in 1979, so it's pretty concise I suppose!

Having taken on the role of Head of Trade Lane Development or Global Trade Lane Manager at Danzas AEI, my team of 10 was a combination of former AEI and former Danzas people as we were in the early stages post integration, the cultural differences still hadn't worked themselves through, therefore managing the combined team was challenging but I was really enjoying the role. Quite understandably, the Air Express International staff felt a little unhappy that a smaller (in UK terms) freight forwarder, Danzas, had purchased AEI (the then number 1 freight forwarder in the UK) and the former Danzas management were running the new combined company. Chris Fahy was UK Managing Director of the new organisation and he was focused on merging the Danzas and AEI teams and achieving cost synergies be that increased margins on existing business (as a result of the enhanced buying power of AEI) and the usual things like merging or sharing facilities.

Although I was leading the team, I also took on a former role from Kuehne & Nagel times, that of UK Trade Lane Manager, North East USA and I began to make the bi-annual sales development / trade lane visits to places such as Rochester (ex AEI location), Boston, Hartford, New York, Newark, Philadelphia, Washington and Baltimore). I partnered up with a several US based colleagues between 2000 and 2007 (when I took on the Western USA area for a change). As I recall, I first worked with Siobhan Burns (now Siobhan Ferrick, now head of logistics at Pall Corporation), Joe Verica (who sadly passed away with cancer) and latterly Jennifer D'Amico, who is still at DHL Global Forwarding working as their regional sales manager for Philadelphia. They were all great to work with, totally committed to the role and super responsive. What more could you ask for?

As time went on Deutsche Post were keen to establish their logistics mega player and to this end, bought stakes in DHL, finally taking complete control in 2002. This allowed them to use the highly prestigious DHL name as they saw fit, and in 2003, we were renamed DHL Danzas Air & Ocean. This was a big deal, as DHL was one of the worlds top 100 brands and instant recognition by customers thus helping our marketing and sales efforts both in SME (small-medium) and MNC (multi-national) clients.

I think this was probably the most enjoyable phase, post integration with AEI, as the integration issues were in the past, we had built stable and effective teams and we had the extra cache of the DHL brand name - but critically we retained the Danzas name, which was a big name in freight forwarding with its heritage all the way back to 1815. Best of both worlds I'd say.

We all thought that this was it, DDAO (DHL Danzas Air & Ocean) was a big player, backed by Deutsche Post and we were performing well - until in late 2005, we all had a bit of a shock - Deutsche Post were in talks with Exel Plc, the world's largest contract (3PL & 4PL) logistics provider.

Next time, I will explain how we had to go through yet another merger in 2006.

Friday, 7 June 2013

Asia Europe Full Container (FCL) Rates

We've just written to Lloyds / IFW, the leading online freight newspaper on one of our favourite topics - import FCL (full container) rates from Asia to Europe/UK. We have quite a few clients on this lane so we know exactly what the market is doing. We've had a few other letters published in the past so let's see what happens...

Dear Sirs

Further to your article in today’s IFW, I have to say I’m surprised that Xeneta believe that Asia Europe rates are stronger than widely thought. We’ve contributed a couple of times on this topic this year, mainly as Asia Europe is a key trade lane for the UK and Europe, and also because we have key customers on this trade lane whose freight models we’re actively managing.

By coincidence, we re-negotiated some business on 22 May, two days before Xeneta advised that the market rate was USD 1978/40 and I really would be surprised if the market rate was anywhere near that level as our rate on 22 May from SHA to RTM was around USD 1300, around 35% less than their figure. At the same time, there will, for sure, be customers who simply don’t have the time or interest in this area whose rates are lagging behind the market, and we see this all the time.

Having said that, Xenata make a fair point, which is that customers need to actively manage their inbound freight costs, especially as the USD is also pretty strong, which directly impacts their landed costs. For what it’s worth, we believe that the huge surfeit of capacity on this trade lane will
make the huge planned July GRIs virtually impossible to implement although we do expect rates to turn as we enter the peak season for this lane.

Kind Regards

Andy Cliff
Straightforward Consultancy Ltd

Introduction continued - Danzas transformation into Danzas AEI, DHL Danzas Air & Ocean and DHL Global Forwarding

OK, so I arrived at Danzas on 2 January 1997 and this was a risk and this is why. I had moved from Kuehne & Nagel, a company with established air freight services, a large and solid operation and market leading pricing to a company with loads of potential but with a low profile in the local market. I'd been given all the assurances by their sales director that I would be able to be competitive and that was absolutely vital if we weren't we certainly wouldnt gain any new customers in what was already a very competitive marketplace in the UK North West.

There was one thing which gave me confidence. Chris Fahy, the regional direcor for Kuehne & Nagel was also joining Danzas UK as their new UK MD and as I'd worked with him at K&N for 7 years, I knew he was very sales and customer oriented and would move heaven and earth to transform the customer offering for new sales people like myself and Peter Devonshire, who joined on the same day.

It didnt take long for Chris to make an impact and after not too long, we were gaining new customers and Danzas in Manchester was on the radar at Manchester Airport. After a year, I was asked to become the Northern Sales Manager and our sales team included Peter Devonshire, Clare Brackenridge and a sales support person whose name I cant recall.

We used to really value our clients and organise training events and social events such as Sportsmans evenings, where we'd take our key customers for a night out just to thank them for their support. These events werent expensive but they were great value and the customers felt truly valued. It certainly created a great deal of loyalty and to this day, I believe that customers really notice when you go the extra mile for them and it's certainly a principle I have carried through into my new business, Straightforward Consultancy, where we have retained all our customers since our launch in 2010.

In late 1998, some big news hit the radar. The German Post Office, Deutsche Post made an offer for Danzas which was accepted. Their vision was to create a global logistics provider and buying Danzas was just the first step.

In 1999, they then purchased a large American forwarder, Air Express International who were a huge player in the UK with a big market share, particularly on air freight from the USA. Earlier in the year, they also purchased ASG International, a Scandinavian freight forwarder with a very strong UK business and another forwarder Nedlloyd.

In 2003, they purchased Airborne International, a strong forwarder on USA eastbound particularly into the UK and then in 2005, the big one, they purchased Exel Logistics for around USD 7bn.

My career in the meantime was going well. in 1998 I had started doing some part time trade lane development work on the USA Mid West in addition to my UK Northern Sales Manager role. This meant I could restart my trips to the USA twice per year but this time, rather than cover the USA East Coast, I would develop the USA Mid West (Chicago, Detroit, Minneapolis, Milwaukee, Indianapolis, Cleveland etc). At the same time, Peter Devonshire began developing Hong Kong and Taiwan in the same part time capacity. It was actually very good for our careers and our confidence, as although it was very demanding, we raised our profiles outside the UK and gained more experience and status.

After we merged with AEI, in mid 2000, the company immediately became far bigger, as AEI was at the time (as I recall) the largest air freight export forwarder in the UK and the merged company had a lot of resources and expertise. I was then invited to apply for a new role, this was as Head of Trade Lane Development for the UK and I was successful. I then began to build a team of sales development professionals who would spearhead our growth to and from key markets such as Asia, Latin America, North America and the Middle East. This tied in with a desire by senior management to create a global Trade Lane Management structure. We would then target growth of our air freight, LCL ocean freight and FCL ocean freight volumes between the country pairs, eg USA UK or UK Hong Kong. I quickly built a large team of people, with a core of around 5 people full time in their TLM roles, and the remainder of around 5-6 carrying out their roles part time (regional sales).

Enough for today, I will tell you more about the transition to DHL Danzas Air and Ocean in my next post.

Thursday, 6 June 2013

Introduction continued - Andy Cliff - move into sales at Kuehne & Nagel

As I mentioned in my last post, the mood at Burlington Air Express, later known aas BAX Global wasn't particularly good in mid-late 1989 and there seemed to be a lot of politics going on as the two cultures tried to integrate, particularly in the middle and upper management levels. My previous branch manager at WTC, Peter Hartley had left the merged company a few months earlier and was now working for Martinair, the all air cargo airline. He was now visiting all the freight forwarders in the North West looking for business.

In the course of his travels, he called on Chris Fahy at Kuehne & Nagel, the large Swiss freight forwarder who had a large operation at Manchester Airport. Peter was asked if he knew anyone who'd be suitable in a sales role, and he recommended me, as he felt that even though I had no direct sales experience, I knew the air freight product inside out and had a great rapport with the WTC/BAX customers.

As a result, I got a call from Mark Oxtoby, the then regional sales manager of Kuehne & Nagel and after an interview with both Mark and Chris, I was taken on in my first regional sales role in early December 1989. I was told by Chris that they didnt expect I'd gain any business before Christmas as it was too late in the year however I had some close relationships with key customers at BAX Global and I was in contact with them within a few days of joining Kuehne & Nagel. I was really pleased to secure trials on two new customers before Christmas which was a feather in my cap and more than that, a confidence boost for me in a role I had no prior experience of. These were USA air freight import customers and as USA air freight was one of Kuehne & Nagel's main development areas, it went down very well.

I carried out the regional sales role and did well, particularly on USA air freight import customers, and in mid 1992, I was asked whether I would take on a national sales development role for the USA East Coast, covering the main airports of Boston, New York and Philadelphia. As soon as I arrived in the USA on my first sales development trip in October 1992, I felt at home and knew that I would both enjoy and do well in this market. Most of the customers we gained tended to be what we now call SMEs, small to medium sized customers, with annual freight spends of between GBP 50,000 and GBP 300,000.

I made sales trips to the USA East Coast twice per year from 1992 until 1996 until in mid 1996, I was approached by Danzas (UK) who wanted to talk to me about a new role developing Danzas's regional business in the UK North West. Danzas at that time were one of the longest standing transport organisations in the world, having been established in 1815 however in 1996, their UK business was very operationally driven and although they had a great international footprint, they were very reliant on historic loyal customers.

I decided that I was ready for a change, having been at Kuehne & Nagel for almost seven years and having limited potential for promotion in a fairly small sales structure in Manchester and so accepted the Danzas offer. I joined Danzas in January 1997, and this was to be the company that changed beyond all recognition after they were acquired by Deutsche Post in 1998.

Tuesday, 4 June 2013

Introduction continued - Andy Cliff - Straightforward Consultancy

After 18 months at Burlington Air Express, I was ready for a new challenge. I'd run the import air freight department and my team had delivered a really superb and consistent service. I'd also introduced some fresh ideas and approaches to the import team.

One was the introduction of a customer profiling system as I was concerned that our clients tended to have dedicated operational contacts which meant for a really personal service however it led to some of the customer specific information (such as Customs Procedure Codes, Customs Commodity Codes and other unique customer requirements) being memorised.

This for me was an issue, because if they were off sick, on holiday or left the company, we couldn't perform to the same level, and also it prevented us from distributing the workload evenly across the team, so I introduced a customer profile form. It wasn't high tech (remember this was 1988/1989) but it was a really effective and clear standard document which profiled the customer, from the obvious things such as name/address/key contact to the Customs Procedure & Commodity Codes, air freight rates and other customer specifc needs.

This was a real breath of fresh air as we then had all of the info in one place and it also helped with sales and the induction of new customers won by the sales team so we got things exactly right. This was of course when we were being monitored really closely by the client and to be honest, when you're most likely to lose a client if you dont perform operationally, or bill things out at agreed rates.

One other thing we did was to strike up a very close rapport with sales to ensure we were working for each other. When a new customer was gained, sales would provide all the customer specific info and what they had agreed rates and service wise and we would then build our customer profile sheet. The thing we also did was to phone the client to introduce ourselves and advise them who their lead and back up contact was. It also gave us an opportunity to clear up any grey areas or gaps in the info provided by the sales people. Most of the time, the customers were really surprised that we were so proactive and were in contact before their first shipment had even moved but it certainly was well received. This was because, as today, most clients key contact is the sales person they met and got to know however these people aren't providing the service day to day.

All this was very useful experience and to add to that I had built some great relationships with the BAX Global customers which would make my transition into freight forwarding sales much easier, more of that later.

Monday, 3 June 2013

First Blog / Introduction - Andy Cliff - Straightforward Consultancy

Well, another chapter in the story of Andy Cliff and Straightforward Consultancy begins today with my first blog, so please bear with me as I learn the ropes!

I decided to create the blog to explain a little more about myself, my background and how I came to launch Straightforward Consultancy (abbreviated as SCL). But equally importantly, I want to share some of my knowledge, insights and observations I have on international logistics and what can often seem (quite justifiably) to many companies to be a highly complex and confusing area, filled with terminology, rules and regulations, and fraught with risk.

As well as the knowledge I have gained in the various operations, sales and management roles I've held between 1979 and 2009, I'm now in a new and really enjoyable phase of my career, gaining a closer insight into the real challenges faced by customers and being able to use my expertise and knowledge of the marketplace to reduce clients' landed costs, improve the service they and their customers receive and provide them with a really valuable source of objective and neutral advice.

I have over 30 years experience in the logistics field which began in 1979, working for a small freight forwarder at Manchester Airport called Immediate Transportation where I was an air freight import clerk. Two years earlier, I'd embarked on a totally different career as a motor vehicle technician as I was fanatical about cars and motorbikes (which I still am) and secured an apprenticeship with Lex Motor Group in Stockport, Cheshire. This didn't last however, as although I loved the work, the industry working conditions at the time were pretty poor and I saw guys in their 40's with all manner of health issues so I made a big decision and went from blue collar to white collar.

At Immediate Transportation, Manchester Airport, as an import clerk, I took care of the import clearances (Customs entries/brokerage) for large and small clients and our main customer was British Aerospace (now BAE Systems) at Chester who at the time were building the HS125 executive jet and making wings for early Airbus aircraft. This meant I cleared all the components for the jets from small electronic components to complete Garrett Turbofan engines which I used to load on to the dedicated BAE low loader which collected from us every day. I also learrned a great deal about the whole import process from ex works to delivery including detailed knowledge of specialised import Customs procedures including End Use Relief and Inward Processing Relief. We also had one of those old fashioned bosses, Mr Coleman, who would make you egg on toast after you arrived at work (hard to believe but very true!).

I was happy there and stayed there for 5 years but the career options were very limited and so in 1984, I applied for and secured a similar role at a much larger global freight forwarder, WTC Air Freight, also at Manchester Airport. WTC were a fast growing South African owned company who had customer service and quality at the heart of everything they did. This approach really appealed to me because in freight forwarding and logistics, an industry with a poor reputation for quality and training, it was rare to find a company so focused on the customer and also one who invested in their staff via training and development etc. They were very innovative and new business driven and had a very good business particularly from the key trade lanes such as Asia and the USA. They also had a profit sharing scheme which, again, was pretty innovative for the time and all members of staff down to the lowest levels shared in the success and results. As you can imagine, this really drove people to go the extra mile for the customer and also it drove grass roots innovation and ideas which might improve a process or reduce overheads etc. This was a much bigger operation than Immediate Transportation and we had 4 staff on imports and after a few years I was promoted to import supervisor.

Then in 1988, the apple cart was upset in a big way - Pittston Group, the owner of one of our big US competitors, Burlington Air Express made an offer for WTC which was accepted and we ended up merging with them in April 1988. As with most mergers, the physical merger wasn't as much of an issue as the cultural merger and it was quite a challenging phase, especially for the managers, with the usual politics. However, we still had to perform for our customers and the combined import department was now 8 people, and we were handling around 1000 import air freight consignments per month, mainly from the USA and Asia.

Initially we were managing the WTC and Burlington import clients separately, so as part of the integration process, they decided to appoint an import manager for the combined department which I duly applied for and secured. This was a big challenge but one that helped me grow as a person and as a manager, all part of the learning process. After a couple of months, we were working well as a team with a common goal - we were totally focused on performing for the many customers we had, both large and small and our KPI was to achieve next day delivery of every shipment. This was a massive challenge on a Monday because most air freight flies at the weekend and so this meant that probably 50-60% of our shipments needed to be cleared through Customs on Monday, quite a challenge. We decided as a team that it wasn't the customer's issue if we were overloaded on a Monday and the service they got shouldn't be affected so we just worked until everything was cleared, with 4-5 staff often staying until 9pm on a Monday to ensure we achieved the Tuesday delivery. By doing that we achieved great customer loyalty (we didnt lose an import client during my time as import manager and I really feel that that was down to the dedication of my team. Our management were surprised at the bond our customers had with our import air freight team as with most mergers, it's common to expect 10-20% of customers to walk whilst the newly merged organisation is trying to find it's feet. We also had the situation where sales people left, expecting to take clients with them but this didnt happen. At the end of the day, it's all about the customer.

In my next blog, I'll talk about how I came to leave Burlington/BAX Global and take on my first sales role at Kuehne & Nagel.

Please follow me on Twitter @AndyCliffSCL, visit our website and also on LinkedIn AndyCliff

Kind Regards

Andy Cliff