|RADU||Hello and welcome to The Leaders in Supply Chain Podcast. I am your host, Radu Palamariu, Global Logistics and Supply Chain Practice Head for Morgan Phillips Executive Search. We are in the business of recruiting top leaders to take your business forward but also my job is to connect you with global experts, board leaders and executives in all things supply chain to share the latest developments in the industry.
This is episode nine, and it is my pleasure to have as a guest Chang Wen Lai. At 27 and with no logistics experience, Chang Wen started the company, Ninja Van, that has 45 million dollars in investment so far with a very steep learning curve, 22-hour work days, sleeping in the office and then, and all sorts of other very interesting activities. He managed to build a very successful company so far. Also Ninja Van went on to redefine the industry by enabling next day door-to-door deliveries for e-commerce firms and the customers, and right now, it’s probably one of the most successful startup stories in the logistics space. Having grown in the short span to regional player, it has a presence in Southeast Asia. Apart from Singapore, Malaysia and Indonesia, they are present in Thailand, Philippines and Vietnam too and currently delivering close to 100,000 parcels per day, so it’s my pleasure to welcome Chang Wen here today with us to share more on the Ninja Van story and what lies ahead for them as well as to tell us more in terms of his views on what type of people, skills and culture they are trying to build to move things forward. Chang Wen, welcome and it’s a pleasure to have you with us today.
|01:32||CHANG WEN||Well, I’m glad to be here, Radu. Happy to help and share whatever I can.|
|01:36||RADU||Super, so let me ask you. I mean, you guys are a very good success story, a very good growth story. Tell us a little bit about the journey so far but also what is next for Ninja Van.|
|01:48||CHANG WEN||All the journey, so far, I mean, we first started when you close to nothing at all. I think we kept a very open mind but let it all kind of mindset so it wasn’t about thinking that we could change everything but letting what the current players are doing and trying to innovate if it makes sense and many times, we will – I said it doesn’t make sense to innovate because they’re doing things the right way.|
|02:08||CHANG WEN||And I think that takes a lot of – you cannot have too much pride when you do this in thinking you do everything you have to. I mean, sometimes, over the last hundred years people have perfected certain things. Some things are just not meant to be changed but understanding what has sort of – I think what has really changed is technology, and technology has definitely changed a few things and the way I look at this is technology is a very good transaction-cost level. You know, it makes certain things a lot easier, more intelligent, and I think when we take that mindset and we look at how technology isn’t just a cost optimizing this business, but technology is an enabler for services to allow businesses to shift, evolve in the light of technology to serve them better that it believes kind of the base in which we kind of believe we can make in effect change in this industry.
|02:56||RADU||Absolutely. No, I mean, it makes a lot of sense. And also, I mean if it’s not broken, don’t try to fix it, right?
|03:05||RADU||It’s a commonality, and there was actually a question from Alberto and we talked about technology and probably one of the most hyped to a certain extent but also, you know a buzzword that you hear. Everybody talking or a lot of people are talking is AI, right? Artificial intelligence. So what I want to ask you, you know, as a technology side, artificial intelligence, how do you see that and its implication the last mile distributions? Do you it has the potential to disrupt industry, to help the industry?
|03:39||CHANG WEN||I definitely think so but perhaps not in the way most people think it will be. I think if you think of AI, if you think of the problem it has brought: autonomous drones, autonomous vehicles moving.
Don’t think that that’s too close. I think it’s still quite fire across the horizon. I don’t expect to see a drone delivering a parcel in my apartment building anytime in the next few years but I think what AI is great strikes when you look at Siri, you look at Cortana and all this.
I think AI has the ability to improve the customer experience, not to lower costs. So again, back to technology is more of an enabler for services other than cost optimizer. People think that AI will allow us to replace human labor in the living pulse, hence, living costs. I would actually beg to differ. I think the first usage of AI in this business at least is how we use AI to provide a fantastic customer service. Is it a call in a call center, AI takes over. We apply on checkboxes very fast, answers all your questions and of course, all these on the basis that the information is there to be found. If the entire business doesn’t ride on technology, if you have no idea what a puzzle is, it is a lot harder for you to answer these questions but with AI, I think you can answer on where’s my parcel or can I change the delivery timing and then, this gets effected and pushed in our logistics system which then changes the time windows, for example.
I think the AI, in terms of helping both consumers if they have lived the experience, in helping our shippers, in scheduling the pick-up slot, changing the details of a certain puzzle, all these can be a lot more seamless AI. I think this is the immediate path for us where we try to improve both shipper and consumer experience with AI.
|05:16||RADU||Got it. Good idea, so before we talk about science fiction, you know, the next step ahead, right? So I think chat bots are relatively are or becoming relativity or more and more, I wouldn’t say mainstream but more and more come. Also, I know the government of Singapore is using some of them for some of the services that they do.|
|05:36||RADU||And just out of this question, another question that just popped up in my mind, also for the optimizations of routes, do you see any implication? ‘Cause I was talking and I remember I was talking with Charles Brewer, he is the C.E.O. of DHL e-Commerce, and he was telling me that they’re trying to do things when it comes to the delivery with route optimizations and because a lot of times, it takes that type of data, it should take half an hour or one hour to do a delivery matters, but do you see any implications of AI also being used in that type of work or -?|
|06:14||CHANG WEN||So I mean, I would say is less AI. It’s more N.L.P. I mean, it’s all kind of under the same realm. When I look at group optimization, I think the first thing most people forget or to take for granted is that the address is accurate.|
|06:17||CHANG WEN||Without accurate address, there’s no route optimization. The question then is how do you get accurate address?|
|06:24||CHANG WEN||And on the back of accurate addresses, how do you build a strong automation engine –
|06:27||CHANG WEN||which learns from previous faults, from historical which is able to do that despite inaccurate work networks.
So again, so a few assumptions like – the first assumption is we know exactly where the location is. The second assumption is we know the exact road networks in Southeast Asia. I think both assumptions are not valid so before we even move into work optimization, I think we kind of have to solve two problems: how do we use a variety of sources in our own internal basis and our feedback mechanisms from our drivers through the driver applications to provide a very accurate address database so we know when an address comes in.
The second would then be given that we know the exact lat-long of an address, how do we know which will lead to it. I mean, look at Southeast Asia. Look at it in Asia for example. This thing’s not surprising to see a one-way road with two-way traffic.
|07:26||CHANG WEN||Very common. A two-way road or a one-way traffic or even more surprising, with no road but people are still traveling to it.|
|07:34||RADU||So how accurate are these road networks, not the most accurate?|
|07:38||CHANG WEN||It is most accurate when you look at the data which is moving, how your actual drivers are sorting in terms of the ground and then building your own virtual network on existing all networks because you know that this building, that there’s no road going through it but somehow the driver always manages and go to that building, deliver something and go to the next building which is seemingly one km detour.
Something’s happening in the ground. We don’t exactly know what but we are collecting all that data, better understand that building b to building a but a 50-meter walk. And well, who knows what? The fence has a hole in the fence, jumping about what we don’t know but he does it so by solving the address and that’s where N.L.P. comes in very strong by solving the road network where there’s a bit of AI in there. They’re then better able to understand where exactly the location is and which will lead to it then the optimized algorithms come in.
|08:35||RADU||No, excellent points and I mean, I think a lot of times we take for granted in the especially in some countries in Southeast Asia that are very basic things like indeed, I mean, are you sure this is the right house? And you know, are you sure that is the right road? Sorry, it’s much more basic. And moving on to the people, say the segment, and also talking about people and what it takes to build a successful startup story. When you guys started, I think you had two co-founders. I mean you still have them. All three of you with no logistics experience and the courting is critical of course. Tell us a little bit how did you get together? Any secrets for you working together very good as a team?|
|09:17||CHANG WEN||My CTO, we were friends for more than five years so he’s helping me fix any tech problems ahead but any business I had before this, he figured it was an important – no, challenging enough thing that they want to get involved, and we’ve realized that the last call could be very complex. We got very excited although we sort of underestimated the complexity of the bill. We thought that we could finish everything in two years, three years on. I think we’re playing 10% of the way.|
|09:43||CHANG WEN||My COO, he was my technician doubles partner when I was 10 years old. We’ve been in the same school ever since so I think we have a very strong friendship, all three of us.
We kind of share the same vision if we want to make an impact in what we’re doing in. We’re not happy just going to work every day and what was the purpose of us, not just for anybody, and what keeps us going, what makes us work really well, I think it’s quite interesting.
I think that mutual trust and respect we have, clear segmentation of responsibility which allows us to align high level objectives. We see them out. We see the peak. We don’t let it get that. But we don’t bug each other a bit how we should take on parts. But we trust that we will always be doing our best, finding the best path and then, we always win the same point.
|10:33||CHANG WEN||So a lot less conflict. We don’t try to come to a consensus on everything.|
|10:40||CHANG WEN||Decisions, generally falling into someone’s camp and we try not to get involved, unless help is asked.|
|10:48||CHANG WEN||I think it allows us to run very fast, and also be very light.|
|10:52||RADU||Yeah. No, super. Super good sharing. And since, you’re now growing a lot. I mean, you had to recruit fresh blood in the team. Tell us a little bit about skill sets, and what mindset are you looking for when you are recruiting talent to move the company forward?|
|11:11||CHANG WEN||So we look at this, we kind of ask ourselves: how do you go and get here yourself in the first place? What was the most important attribute we have? And I think, it’s quite similar to what I said before, it’s a lot of it is self- awareness which means I don’t know where you think but on a good learning and self-awareness is fantastic for people who want to learn because they know that they did not know.
The worst people are those who think they know everything. The second worst people are those who do not know that they don’t know everything and the people who like the high are the people who know that they have big gaps in the information and these are people who keep poking, keep learning, keep trying to improve themselves.
Whether is their technical expertise. Whether is it in management, you know, leadership? So these are the kind of people we look for, people who are hungry, people who know that there’s a lot to learn and act if you want to learn and of course what really helps at this is a very strong logical mindset so as smart as in the logical mind was how we learn and no ego. Keeps improving himself every day, okay [and] eventually become great leaders in Ninja. And this is exactly the kind of people we look for.
|12:17||RADU||I think it brings a very good portret but if I am to probe a bit further, is there a way in which we identify because that’s also very it’s not so easy to tell. How can you tell if somebody has the desire, that hunger to learn but at the same time, less ego.
|12:37||CHANG WEN||Well, I think the hunger to learn and less ego. So Ninja could appear to be very traditional hub and spoke network so on. Yeah, it’s kind of a schoolbook of sorts. It’s when you put them with what ifs, asking them could you do things the other way, when you see a sense of stubbornness and unwillingness to shift his thoughts from the wrong into something becoming more open minded and as we detect a lot on ego. We detect a lot of people – think they do it all and they refuse to keep an open mind so there’s no single cause and effect. You can never ask them “What, are you open minded?” or are you self –|
|13:19||RADU||You cannot. They’re not going to say yes. To|
|13:19||CHANG WEN||answer that kind of question, you never ask but you can tell from conversation very strongly someone who’s very stubborn. You immediately can tell someone who’s super confident. Yeah, but no one knows everything, and not everything is black and white. There are many shades of gray. People who are willing to accept that this is a shade of gray which I have an opinion on. You have a different opinion which I’m not sure if you’ll agree with but we’re both not wrong but are we both right, but let’s explore and then that ability to explore and distil the fundamentals of the core concepts is something we look for on the second stage.|
|13:55||RADU||Moving on, I mean that you obviously are an entrepreneur, I think you had a successful and interesting bunch of foreign job as well. I wanted to ask you, what do you think – what does the word ‘entrepreneurship’ mean to you?|
|14:14||CHANG WEN||Well, I think what it means is you are ready to fail if you try your best. So entrepreneurship isn’t about saying “I always want to be successful” or entrepreneurship is saying “I want to embark upon on a journey where I constantly learn, be it because I’m successful or I failed” so I didn’t feel successful itself before I failed. The answer there is because I learned. It’s always what’s next and remembering what’s behind which makes you an entrepreneur.|
|14:42||RADU||Yeah, I mean we typically learn more so from when we fail and win the challenge rather than when we are comfortable. I guess there’s a commonality in that and if you cannot put a big play there, I mean, I guess you shouldn’t start a business because there’s a lot of that.|
|14:57||CHANG WEN||Yes. Even in a successful company, you fail in any type. You fail in any aspect.|
|15:00||RADU||Correct. Correct. so I think that that’s a part of life but sometimes and I’ve also been in Asia for about 10 years and in Asia, you have the concept of losing face, right? It’s something that, you know, for an entrepreneur is almost impossible. You can’t even forget it because there’s no need to worry about it|
|CHANG WEN||Which is why maybe the best way to look at, you know, if you are an entrepreneur, you should throw away your face first assuming you have nothing to start with, then you will have everything to gain, right?|
|15:27||RADU||Yeah, beautiful. Throw your face. It’s a good expression of amusement for the future. And with that, let me ask you what’s a piece of advice, I mean, that you received through your journey as an entrepreneur that you think was really valuable or it really stuck with you, really helped you?
|15:44||CHANG WEN||Well, the best advice I’ve gotten was keep your eye on the prize. Don’t worry about a lot of small things. That’s one. Actually, no, I think the best advice I’ve ever had was that in life, there’s never a right action but it’s always right thing to do it at a right time.
And I think this is the place a lot of management philosophy but it really is a culture or strategy. There’s no right culture. There’s a right culture at the right time. So be very cognizant of two extreme ends of the spectrum, and figure out which shade of the creation at any point in time and how it’s always evolving. So when people are super prescriptive and say “Look, the way to be a manager, the way to be, you know, a leader is to do this.” Generally, that’s bullshit. Nothing’s ever on the extreme end.
|RADU||Yeah, and there’s no such thing as a – and that’s what I mean. A lot of people pretend to know it all and they pretend to be gurus of this and that, but ultimately is there really a formula for success? Maybe. I mean, if you keep yourself open and then form to the different circumstances and different contexts and be very clear that it adapts and it changes along the way like you said that’s the formula.|
|16:57||CHANG WEN||The companies you can manage, the company’s a thousand men. I think you run things very differently, right? So no one can say this is the right thing to do, yet, you know, you should know how treatment company looks like in a ten thousand person company looks like and trying to figure out alone and how you should evolve along the way.
|17:23||RADU||Yeah. Is there any personal habit that you think contributes to your success?
|17:30||CHANG WEN||Well, you see, I’m a bit O.C.D. So I like to respond to things very quickly and I believe in being very responsive and I think that’s one of the key attributes which won us sort of initial confidence from our customers.
Look, essentially, if you text me or you send me an email maybe from like 3 AM to 6:30, chances are it’ll be three hours before you get a reply but any other time, if it’s important, you’ll probably get an reply in two minutes. And I think that kind of responsiveness is the play button of the business because in logistics, you’re never 100%. You always have failures. But it is in handling these failures which you really make a mark. I don’t profess to handle 100% of cases either. There are things that slip through the cracks but this culture of we know that we can never be perfect but we try to be perfect at fixing all the imperfections,
|18:23||CHANG WEN||We try to catch everything which falls through the crack but we know there will always be cracks and I think it’s culture – I think it’s true, the entire organization and it allows us to be a lot more responsive, a lot more caring, a lot of the mindful about clients care and I think that these helped us really grow like from one customer to thousands and thousands of them.|
|18:44||RADU||Yeah. I know. I mean, also people typically appreciate, right? The customer, recovery experience.|
|18:53||CHANG WEN||Yes. Yes.
|18:54||RADU||And actually in those moments as we even ore important because there’s the bit the chance of deepening your relationship with the client if you do it right. You’re not going to pretend how to, you know, just lay low and the only thing and of course it depends the problem. A good point that you made there.
|19:07||CHANG WEN||But don’t get me wrong. I’m not saying that we have a perfect customer recovery but if you look at our priorities, if we had limited resources, I ask to move my sale prospects from 99 to 99.9. I move my service recovery from 90% to 99%. I always choose recovery. Yeah, because when people are pissed off, they get really unhappy.|
|19:25||RADU||I know and also you have social media and they get really unhappy and really loud so it’s another reality|
|19:28||CHANG WEN||So if everything goes well, you know, it should be the case just five minutes late because of heavy rain, you know, why care?
|19:46||RADU||I’m in need.
|19:48||RADU||Can you share – do you have any, I don’t know, resources, online, websites, courses or anything that you keep yourself updated to learn to keep the trends on your desk?|
|20:00||CHANG WEN||Well, to be honest, I think I’m a bit ashamed to say that but not really. I think my best source is Facebook. Make friends with people who are useful, not people who are just taking pictures of themselves, that you get the best knowledge base. I mean, I do unfollow a lot of people who post pointless because of themselves but you realize that your friends are your network, that is your best source of knowledge.|
|20:22||CHANG WEN||They post a lot of relevant articles and you read it. And I mean, I use Flipboard as part of subscribing to a number of their publications but I find it best to, first, my friends,|
|20:31||CHANG WEN||The way they post interesting aricles.|
|20:32||RADU||Got it. Final question from us: If you can give some advice to somebody graduating university and I know that you know this, you are very young as well, you had different trajectories so what kind of advice would you give for a young graduate of a university?|
|20:51||CHANG WEN||Well, it is somehow quite out of the ordinary but I would – my first advice is don’t get married. A little bit funny but why?
So I believe that going to a startup isn’t to get you quick bucks, don’t you think? It is really to quicken your learning curve at the expense of your wealth.
|21:12||CHANG WEN||Chances are you’re going to exit the startup poorer than if you work for an MNC. Your expected value is definitely lower. This means that the only reason why you should join a startup is so that you can learn in three years as what you’ve learned in six. However, I think, to really get a good learning of a startup is a good experience corporate life. When you see a lot of bad habits coming in from people who leave the university and join a startup, poor work etiquette. Some of them, they just don’t know how the real world functions.
I mean, you might have an internship but is not the same as in two, three work years. So my advice would be don’t get married. Work for two years, but quit after two years. If you’re married, you cannot quit. You’re scared. You have mortgage to pay. Hopefully, you don’t have a kid but if have a kid, good luck.
|22:00||CHANG WEN||Then quit|
|22:02||CHANG WEN||So don’t get married. Look at a big company for two years. Understand and keep your eyes open. Why are companies doing what they are doing? They are the reasons – then leave, join a startup, experience how it is to work in a three-man group but always remember how it was to work in a 30,000-men in along the way adapt.|
|22:17||CHANG WEN||I think this way, you get both extremes and you learn along the way.|
|22:26||RADU||Yeah. Got it. No, good points. And maybe the point is not to get married or don’t buy a house. Don’t get extra headaches.|
|22:43||CHANG WEN||In Southeast Asia, it’s really, really hard to get married and not buy a house. That’s another – The parents-in-law would never allow it.|
|22:49||RADU||So I’m assuming you’re married. No, but good point, so Chang Wen, thanks a lot for your time. Thanks for the sharing. Really good insights today, and it was a pleasure to have you with us.|
|23:01||CHANG WEN||Yo’re welcome, Radu. Thanks.|
|0:02||Radu||Moving on to the final segment, the personal side, so we have a very good question and I think it’s on the minds, probably, of a couple of our listeners, the people that you know personally, as well as people that don’t know you, but know you from the industry.
So Mark asks, “So you’ve had many roles, Tim. You’ve had a very clear development all the way to the top. What’s the main driver and wish for the next step? More risk, more fun?”
|0:30||Tim||Sometimes I wish I was more of a risk-taker than I am. I think this is the biggest risk I’ve done in my entire career. I’ve been so lucky that jobs have always kind of appear for me with – I mean, coincidentally. That seem to just helped my CV, and it has been something I like to do and something that’s given the necessary learnings and exposure. I would like to try something totally different now if possible.
I do know that I’m an expert in container shipping, but I mean, so more risk and more fun. I mean, fun I don’t need more of. I’ve had fun. Seriously, I had fun. This is my fun and there was another question about my fulfilling and greatest achievements in this role and you know, when I see how happy my people are, you know, I was in China a couple of months ago and you know, everyone were just unbelievably happy and energized and motivated, and can do and I mean, that is just fantastic. That is what is fun for me.
Then I have achieved my goal as a CEO. You know, when I see that. It just make me incredible happy and there’s nothing more to ask for. Then of course some people ask me so why do you quit? I mean, why do you leave MCC? But, I mean, hey nine years in the same role and I don’t think I can retire in this role. I think I should try something new in my life before it’s too late. I also don’t want to go to the grave, having worked for only one company. I mean, although 14 different jobs, but I’ve only been with Maersk Group, you can say, for 27 years, so it made a time to change. Thanks for the question, Mark! Maybe it’s time to take some more risks for the next one.
|Radu||And try a different type of fun, right? It’s –|
|Tim||Yes. I would go traveling with the family and so on. You know, do the Inca Trail in Peru. Since I live in Argentina, I always wanted to do the Inca Trail and before my legs give up, then I will do that.|
|03:05||Radu||A lot of people like to ask questions about routine, so you know, before you went to work, did you follow any, you know, as a CEO, did you follow any morning routine?|
|Tim||I am actually very superstitious, so I don’t know if you know rugby, but I play football at a very high level when I was young. I actually even had an offer for Spanish Football Club when I was 15.|
|Radu||Oh really? Which one?|
|Tim||Yeah, so I was, at some point, thinking –|
|Radu||That’s really good.|
|03:37||Tim||And you know, I always you know, wore the left shoe before the right shoe and you know, there are certain things I have to do.|
|03:40||Tim||And no matter where we were, I have to take a ball and go on foot, you know kick it in the net before the match started, just to like feel the feeling of making a goal. If I didn’t do, I would usually not play well. I mean, it’s quite superstitious, but I think when it comes to work, not really.
Actually, not really. I try when I’m traveling not to make my program too crazy. I’d rather taking an extra day than trying to squeeze in nine meetings in one day. There was a day in Davao I remember where we have nine customer meetings in one day and one thing is I lost my voice, but secondly, there were two things that bothers me.
One it was physically very hot, but number two is, you know, as I said before, I care a lot about the relationship with the people I’m with, so I don’t care if there’s nine customers. Some were rich, some were small, but I wanted to create a good impression on all nine. That’s impossible.
That is just physically impossible, so I realized that I should probably – I must make sure to have energy to give 100% of me with all the people I meet. Otherwise, what’s the point of meeting them. Then I run a lot, because if I can’t give a good impression, if I can’t add value, and if I can’t make a difference for our you could say relationship with MCC, then what’s the point of even meeting them.
So I have, in terms of routines, I have cut down to usually not starting early morning, not starting until 9:30 for something, which was something I didn’t do in the past, and actually usually trying to avoid dinners in the evening. Not both, I mean external lunch and an external dinner, because then I realized I can give you much more. I get more of it, and it does sometimes cause an expedite traveling, which my wife doesn’t really like, but that’s just too bad. MCC likes it. It’s good for MCC and yeah, she says I’m married to the company sometimes, but anyway.
|06:01||Radu||What is something that you believe in that other people think is crazy?|
|06:03||Tim||Well, as I said, I do meet a lot of people and I think some people say, hey as a CEO, you shouldn’t really do that, but I think it’s the right thing to do, and I have such a good team here in headquarter in Singapore, so they can run a lot of the business now by themselves with some guidance, but they’re good enough, so where can I add most value. I want to add value, so yes, I am actually out meeting people at all kind of levels, which yeah.
It’s maybe not so normal, and then I, well, in this interview, I spoke a lot, but actually I try to listen a lot to what people say. I’m just the kind of person that – I always tell people well, I can change my mind easily if you can convince me. I’m just saying, so this is how I see it, but if you see it different and you are able to convince me, okay. Then I’ll see it differently, so I always challenge the people around me. It doesn’t matter which level to make me see the world differently. Change my perception of things. If they can convince me, then clearly, they must be right. If I’m convinced otherwise, they must be right. If they can’t convince me, then clearly they’re not right.
|07:22||Tim||Of course when I say this to them, I also joke a little. I say, you know, if you can’t convince me, then you got to find data, if you still believe that you are right. Then don’t give up, but go back. Find data.|
|Tim||Find documents, find something better, and then you come back and convince me again.|
|Tim||I’ll give you that chance. No problem.|
|07:43||Tim||And what else do I do which is crazy? Yeah. You know, I’m not good at accepting people making the same mistake twice. Sometimes, I am told that I’m very large and very kind CEO when people make mistakes, but that’s because I believe that, you know, if we were robots, we wouldn’t make mistakes, but we are humans and humans make mistakes. That’s the fun part about humans, but just don’t make the same mistake twice, because then you have shown me that you don’t care and you don’t want to learn, and it doesn’t matter to you. And that is just not on for me, so I am very kind if you can put it like that, but if people make a mistake no matter how stupid it is, but if they do it again and they could have prevented it, because they didn’t really care about last time they made a mistake, I really get upset. You can ask my kids about that one. I think they can –|
|Radu||They might have some interesting story.|
|Tim||They can confirm that one.|
|08:56||Radu||We learned a lot also when we are challenged, right? So if you are to choose one of the, you know, from your past, one of the most challenging experiences that you have faced and how did you fix it? How did you solve it?|
|09:20||Tim||Yeah. So probably, people will suggest this intra-Asia project, but actually I didn’t consider it a big challenge. I know this sounds weird, but I thought it was an opportunity and I’ve always thought we couldn’t go wrong. So if you ask me for the biggest challenge in my life, that’s probably not the one. I have maybe two.
One is when I worked in Argentina. At that time, Maersk acquired Sealand and we took also over a lot of people from Sealand, and then I had a lot on my desk and I had weeks where I work 12 to 14 hours per day, everyday, so at that time, my son was just a baby and I only saw him on the weekend, because I would leave before he woke up. I will come home and he was sleeping, and I remember talking to my mom one day on the phone and suddenly, I was in my office in Argentina in Buenos Aires, and I said to my mom, “Mom, I cannot see anything right know.”
I don’t know what’s happening, but I can’t see anything. Everything got dark. I couldn’t see anything, really. Never tried anything like it, and then my mom got so upset at me and said “Okay, you are clearly overworked and overstressed. You’ve got to find another way.” And this was, you know, but I was the second in command and I was like in charge of everything, and I took everything on my shoulders and I just learned that you can’t do that. You can’t do it on your own.
|Tim||You have to use your team, and then the other challenge I had was taking an MBA. I mean, I took an MBA in 2007 and 2008 in London Business School and Columbia, New York, at the same time as my full-time job in Maersk. And I have to thank my wife for that one. Because I have also two small, very small children, so that was so tough and it took 20 months and you have this –|
|Tim||20 exams, right? That you must pass and I was away either in London or New York one week every month for 20 months, so I was 10 times in Manhattan and 10 times in London. A little easier from Denmark glad I was there, not in Singapore, but it was so tough. And I didn’t miss a single class during those 20 months, because I said, you know, if the company is willing to pay, I think the total cost ended up being $200,000 or something. If the company is willing to pay this for me, then I need to put in the effort.|
|11:50||Tim||Put it an effort. So I didn’t miss any classes. I mean, at least I was there physically in all the classes, but that was just so tough and if anyone of the listeners are thinking doing an MBA, I just have one advice. If you have children, just make sure that your spouse is –|
|Tim||On board on this one.|
|12:13||Tim||Because it takes a toll on your spouse as well.|
|12:21||Radu||Yeah. I’ll go to the last question because I think it’s the most interesting one. If, you know, we have very young business, we have people that are just starting there in the shipping, in the supply chain careers. If somebody would ask you if they wanted to be the CEO of a large company, what advice would you give them? What would you say?|
|12:44||Tim||It’s a tough question, but then, one thing that I have learned is that sometimes, you actually need to think very carefully of who your boss is, so I had 24 bosses actually in this 14 roles I have had and I think that has helped me a lot in learning both how to do things and how not to do things, and I think you need to be humble in every role you have in just considering all these, was it different people or seniors that we work with as opportunities to learn.
In my daughter’s school, they have this interesting word which they call fail. When you fail something and they call. They call it first attempt in learning and I think it’s such a strong phrase because, you know, don’t be put down by failures or mistakes, or things not going exactly the way you wanted them to go. Just always try to focus. Okay, so what I can learn from that? Why did this person think like that? Why do I think I do a great job and my boss does not? And what do you do when a boss, for example, does something you totally disagree with? Because that’s a tough one also, right? I mean, do you object? And how do you –
|Radu||How do you object?|
|14:20||Tim||How do you object, right? I mean, you don’t want to get in trouble also, so sometimes some younger trainees come to me and ask me for, you know, so how should they take their next role and which one should they pick? I actually tell them, you know, look maybe less in your early career on the salary package and so on. I mean, anyway, hey will you make 2,000 or 2,200, or 3,300. That’s not what’s going to shape your career, so think about who you work with, what you can learn, and whether you will enjoy the job and well, you can add value.
I once got an offer to work for Maersk in Vietnam and I really wanted to go to Asia. I was sitting in Denmark. I wanted to go to Asia and I got a job offer to be CEO for office manager for our office in Hanoi and I thought, ah yeah, I can get back to Asia, right? But then I started analyzing. Okay first of all, I have to work Saturdays as well, so that means six workdays. At that time, we work Saturdays in many Asian countries. I will work a lot, but I will not get any exposure, because Hanoi is reporting to Ho Chi Minh, that’s reporting into the Singapore office.
That means the exposure to the Singapore or Asia headquarter, I wouldn’t get, because I would kind of only report down to Ho Chi Minh, and I’ll be on my own. You know, my boss will be sitting in another location, which is difficult if you want to really learn early in your career, so I actually rejected it, even though it was fantastic opportunity to be office manager for 14 people and I think many would have accepted it, but I actually rejected it.
And then I got Argentina instead, where I got all the things that I wouldn’t have gotten in Hanoi, so maybe an advice is not to jump on the first opportunity that’s presented for you. You think carefully what you will get out of it and can you add value, and do you then get. I mean, do you get something –
|Radu||To do more, learn more, yeah.|
|Tim||Yes, exactly, and would people notice?|
|Tim||Because I mean, let’s not beat around the bush. You need to – I mean there are many people fighting for good positions. You need some kind of –|
|Tim||Visibility, so it doesn’t matter if you do a hell of a great job in Hanoi. Nobody’s going to notice. Then is better, have a lower role like in Argentina, but everyone noticed.|
|Tim||Anyway, yeah. If I have longer time, I could give a lot of more advice, but I think I said enough already.|
|Radu||Tim, it’s been a pleasure. Thank you so much for the time, for sharing with us today.|
End of Episode
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|0:23||Radu||Hello everybody and welcome to our fifth episode of “Leaders in Supply Chain Podcast”. We are happy to have together with us today Tim Wickmann, former CEO of MCC Shipping. Tim has 27 years career with A.P. Moller-Maersk Group. He served as vice-president in various portfolios for 10 years.
In the last 9 years, he was the CEO of MCC, the intra-Asia shipping specialist. During his term, the company became one of the most successful organizations in the history, from humble beginnings, maybe to the 17th largest line of company in the world in terms of capacity, among top three feeders globally, operated 90 ships, and had over 600 staff in local agencies in 14 countries across Asia. So great success story. Well Tim, welcome and thank you for joining us today.
|1:13||Radu||So for today, as our normal series of questions, we will have questions regarding the shipping industry, questions regarding people and talent, as well as questions regarding personal advice Tim might want to share with our audience.
So without further ado, let’s start. Let’s deep dive into the first question, which I would really be interested and I think a lot of our listeners would be, Tim. If you can tell us a little bit about the story of MCC, you know.
How did you start from early beginnings to way you left off? And maybe if you can derive two or three key learnings in terms of your success story.
|1:50||Tim||Yeah, I mean, of course it’s a long story I have to admit, but I’ll try to make it brief. It basically started back in 2007, where we in Maersk Line and I was also working for Maersk Line at that time, where we, through some help from consultancies and so on, identified that it was an issue that Maersk Line was not represented in the biggest market in picking container shipping market in the world.
When we look ahead, basically 10 years ahead, where we actually are not, we estimated that close to one out of four containers in the world would be intra-Asia, which is obviously a very large share and when you ask, the world’s biggest shipping line had less than 1% market share in what is the world’s biggest market, then you lose out.
Not just in terms of profit, but you also lose out in the biggest growth markets of your biggest customers and, of course, you are presumed of lowest possible cost. This is a problem because the scale that you have in Asia without being part of the intra-Asia market is actually not that big, so to make a long story short, we concluded that we have to do something in intra-Asia and we then spent about 6 months figuring out how to do that, because there was obviously various ways we could acquire an intra-Asia shipping line.
We could set up a Maersk intra-Asia services or we could do something different, and that maybe brings to one of the key learnings that you asked for, being that we really listened. We interviewed our own people, we interviewed customers, we interviewed suppliers, we interviewed even competitors, who kindly enough suggested various ideas on what would be successful and what would not. And based on this input, we concluded that probably, the most successful route to take would be to have our own company and it had to be in the region and it had to be dedicated to intra-Asia and nothing else, so that’s less than three minutes.
Basically, how we decided to set it up. And then I got a call from the COO of Maersk Line and he basically said to me that since I’ve been talking about intra-Asia for so long, complaining on why Maersk Line is not doing anything in intra-Asia, he said then “There you go. Now you go and do it.”
And then, of course, it was a huge challenge, but for also, as I saw it a huge opportunity, because not being in the world’s biggest market would mean that in principle, you can only grow, and that leads me maybe to the second key learning of how we set it up. I mean, we basically looked at what is Maersk Line? What is Safmarine? One of the other brands that Maersk has. What are the popular shipping lines in intra-Asia and why are they successful? Then we decided to build up MCC around. You can say the best of both worlds as we call it.
|5:21||Tim||But it was really from the beginning and MCC existed as a feed operator in Southeast Asia, had 32 ships, had an organization like a basic organization, only South East Asia. So when I came out to Singapore, home office in Asia, we basically had to start from scratch.
Then we appointed a manager in each of the countries and then we gave some guidelines to these managers, maybe very unusual or different than many other companies. We basically said, you know, these are the guidelines. This is what we want. We want to build up intra-Asia, but how we do it, we leave that up to you.
|6:05||Radu||Yeah, so you empowered them to take the business issues.|
|6:07||Tim||Total empowerment. We basically said anything which is legal. If this is what the market wants, you do it. Don’t think about what you have learned in the past. I mean, everyone came actually from Maersk. It was key people from Maersk.
Don’t think about what you have done in Maersk or what you heard from other companies. I mean, just do what you think is right in terms of setting this up. Of course, a gamble and in some countries we were incredibly successful, very quickly.
In some other countries, it took longer time because very much dependent actually on the manager that we appointed, and the people that this manager were able to get into his or her organization.
Then I traveled a lot because the headquarter, I brought with me a colleague from Copenhagen, intra-Asia for Maersk. So he was with me in the headquarter and actually both of us traveled around a lot, listening again to people and making sure that all our countrymen are on the right path.
We have very few like rules that we have to follow, but one of the rules we set up from the beginning was that there could only be four layers between the lowest rank in the organization and me. It has been transpired into now five, but still we have grown from basically nothing to actually, the shipping line with the biggest carrying capacity in intra-Asia in just eight years.
|7:48||Tim||We still only have five layers in the whole organization. Of course, I have learned a lot through 27 years and one thing I definitely learned this, that the more layers we have in an organization, the longer time it takes to make decisions, and having to go through three or four layers of authority and managers, and so I mean, especially not if you want a startup and you have to make decisions very quickly.|
|8:17||Radu||Clients don’t like it as well, because it translates into longer time.|
|8:22||Tim||Of course and this is why we also gave our countrymen. It is basically full authority to run the business, including pricing the business. Of course, looking back, was that 100% successful everywhere, maybe not.
I mean I did feel from some markets that other carriers complaining that MCC is under pricing the market because, I mean, we didn’t have the knowledge in certain market. We had our cost, but not necessarily a knowledge about what’s possible to get out of the market.
So maybe we were a little too aggressive in certain markets, but hey you know, the first couple of years in a startup like this, you need to get some kind of phase and some kind of mass. Then when you have reached that, then you can stop. You can say put things more into processes and so on. So we had actually a couple of phases as we call it.
Phase 1 was called explosive growth. I mean how do you reach explosive growth if you many layers and a lot of bureaucracy, and especially not in intra-Asia, where things move so incredibly fast and decisions must be taken.
|9:34||Radu||Plus your client base is very diverse and it’s extremely also country-dependent, and these people with different needs and different wants, and different realities, and different geographies, and a lot of very localized context.|
|9:47||Tim||Absolutely. It’s one of the big differences in the intra-Asia market compared to any other market in the world and that is that most of the cargo ship is actually controlled locally. It’s not nominated from other regions of the world. We estimate about 80% of the business is actually controlled locally and in some countries, we are talking 90 to 95%.
So this means obviously that to be sales in an intra-Asia company, you need to go out and get the business. You don’t get any help from anyone, so you need to have also the exact right people to go out and pursue this explosive growth. And again, some place, we were incredibly successful.
Some places, it took a little longer, but what we did was we did a lot of best practice sharing in the beginning, so anything that worked well in one or two countries, we immediately share to the other countries. We said, “Oh hey, have you thought about this? Have you thought about that?” The fun part was actually that those countries where we had to set up ourselves, meaning in China, which we have split in three and Taiwan, Korea, and Japan, except maybe for Japan, then the five others actually where we saw the biggest success when we started whereas South East Asia will be too global and already existing MCC organization. It took a lot longer.
|11:17||Tim||To actually grow. I can even say it’s only in the last three to four years that we have really seen a major position taking from us in South East Asia –|
|11:27||Tim||As well. And across that brings all that learnings to the table.|
|11:33||Radu||But it’s very interesting because if we have to summarize right? It’s the starting. I mean it’s the fundamentals into – It’s almost like it’s universal fundamentals, like listen.|
|11:43||Radu||Ask your clients about what they need and listen to what they told you they need. Keep it simple and in a full five layers, that’s it. And if only more companies were like that. Give empowerment and empower your people to take the right decisions. Do what’s right, not follow some norms. And I mean, it’s great. And then communicate, share best practices.|
|12:07||Tim||You know, when you start a company. I mean it has a lot of fun, but there’s also a lot of decisions you have to make. You know, do we go left or do we go right? And then, and now I don’t want to sit here 10 years after and say that we were so smart and everything went right because we were really smart. I mean, I have to admit there was also a little luck.
I mean, sometimes you have a choice to go left or right and you choose to go right and the pros and cons and both, and then it turns out to be absolutely right. One of the things we did right, for example, was we didn’t transfer all the intra-Asia business from Maersk to MCC overnight.
|12:48||Tim||We spent a whole year slowly transferring the business over. We had already established that Maersk really have to step out of intra-Asia if we in MCC were to be successful. Otherwise, we would –|
|13:04||Radu||Compete against each other, yeah.|
|13:06||Tim||We would compete against each other and that would not have worked. We would have lost as MCC because it’s all Maersk Line’s containers, so we would have lost. We needed our own right for containers based on our forecast and without anyone from Maersk interfering in that. So we also have a lot of choice. We had to make with what’s, you know, should we continue being what’s called a feed operator?
I mean should we continue to serve other shipping lines or should we now just focus in intra-Asia and then carry Maersk Lines’ containers, and we chose to continue being a feed operator. We are, in fact, these days, we are developing this work because it’s actually more attractive and many portals than the intra-asia itself. Hey, it’s one of those where we could have gone the other way.
|14:27||Tim||And we could actually have said, you know, let’s not do the feeder or let’s do it in a separate company or whatever, but then we said no, let’s just keep it because at least it gives us the flexibility and man! That was a good decision.|
|14:10||Tim||So sometimes I have to say also a little luck has to be there as well.|
|14:16||Radu||Always. And I think there’s a saying that success favors the bold or I mean, you need to have the the courage to take action, right? And you did try this Maersk rightfully looks strategically in the market, so okay, let’s do something, and then indeed it turned out to be right and okay. I mean there’s always an element of luck that if you don’t do it, you can never be lucky.|
|14:41||Tim||And then I believed in this project.|
|14:44||Tim||I mean I really strongly believed that if we just did it the right way –|
|14:50||Tim||Then we would be successful. And I asked, at that time, CEO for Maersk Line. I’ve been calling. I basically asked him for, you know, authority to do whatever I needed to do without anyone interfering and you know, I’m thinking back, you know, what were like the few key decisions made by me or by Maersk Line that this actually would be successful, and I think one of the key decisions was really that if you basically said to me you get five years and nobody will interfere or tell you what to do.
Of course, we will seek advice and info from everyone in Maersk Line, but basically the only one who can decide what MCC should do is you. I mean that’s an incredible faith, I thought. And you know, it’s one of these things that I think learning, right? I mean if you really believe in that person and that person is very eager and have strong belief, him or herself in his project and you know, maybe take a chance with that person. Maybe you set five years just to give me some time.
Maybe and he said it was only two years or three years. I don’t know, but I really felt that okay, this is up to me. It’s up to me to make it successful. And I’ve been, you know – the way I have run MCC, there has been some ideas coming from some countrymen. If you believe so strongly, you know, tell me if I can do something to help you and what you need, but you know run with it. And then of course follow it very closely and if it goes the wrong way or I can see it’s not following the original, I might –
|16:42||Tim||Tweak it, right? I mean I saw that as a key role for me as you ought to tweak ideas that my staff were doing, so having somebody who really believes in what they do is right. Maybe sometimes we as leaders should gamble a little on these people and let them have the chance you know. That’s what people did on me and it has worked. Okay, sometimes it could go wrong, but it didn’t.|
|17:08||Tim||And I think that was very important.|
|17:12||Radu||And that’s a super powerful message, because I mean it stands true for business, it stands true for sports, it stands true for families, and it stands true for a lot of things. I mean the principle of trusting somebody, empowering that person to do and that person typically will give his best, especially if he’s also, of course, interested and believes in the project to do much better than anybody else could have told him or her to do.|
|17:37||Radu||Yeah, it’s a great sharing. Great lessons. Thanks a lot for that, Tim. So if we are to move on a little bit, we have a couple of very good questions regarding the shipping industry in general.|
|17:50||Radu||From our listeners. So Christian Go asks “Do you think the trend of carrier consolidation will go on? Do you think there’s going to be like, you know, three or four major players left in the future?” What do you think will happen?|
|18:04||Tim||Well, I think even I have been surprised by the speed of this carrier consolidation. You know, I’ve always thought that, so now we are looking outside intra-Asia, because intra-Asia is very different. Intra-Asia still consists of more than 80 shipping lines and I think the prospects for consolidation in intra-Asia is very different from the other trades.
But then, I’ve always said that carrier consolidation is necessary, but the speed that it has happened with has surprised even I. I have to say. I do not think that we are more or less with the latest announcement of Costco and Japanese going together and the Koreans didn’t go together and one disappeared –
|18:55||Tim||And all the rest are kind of try to force some kind of corporation. I think maybe in terms of carrier consolidation, that there’s maybe not so much.|
|19:09||Tim||Yeah. Because, I mean, yeah sure it might help regional players and so on, but the question is will it happen to a merge or acquisition, or will it happen to just increase corporation, like has been announced that a company from Singapore and Costco will have a corporation. And those 14 remaining Korean shipping line will have a corporation. I mean, maybe that’s more –|
|19:33||Tim||The way it can happen and maybe the Taiwanese will need to do some kind of corporation instead of fighting each other, but would they actually merge or consolidate. I think maybe not, but hey, I didn’t expect this enormous change in just two years’ time, so I cannot.|
|19:54||Radu||You’ll never know, yeah.|
|19:55||Tim||What’s happening in intra-Asia and the reason why it’s different is, you know, intra-Asia is 10,000 port picks. It’s an incredible spaghetti of corridors and you know, all these 80 shipping lines seem to all help you with their own –|
|20:16||Tim||Their own strength and so on and because there’s not so much contracted cargo because a lot is on spot or short-term deals with customers, a lot is controlled locally and if a shipping line acquired another shipping line, then what do you actually acquired? Because you are not really acquiring the customers as such, because there are 80 other alternatives out there and they can be priced away from you in very short time. So you’re acquiring more the assets, so somebody has great assets. Okay, and you can get them cheaply, fantastic, but that’s unlikely. These assets are great. You are not going to get them cheaply.|
|21||Tim||And then what’s the point? And scale in intra-Asia is different. You know, many ports that I remember seeing on Linkedin. There was also question about vessel sizes and the issue in intra-Asia is that many of these ports cannot even take bigger vessels, and people in intra-Asia want frequency, and they want flexibility, and they want direct services, so the argument for larger vessels in an intra-Asia market is basically not there. It’s actually negative to have large of vessels as I see it in intra-Asia and when I say large, I’m just talking approximately 3000 tons vessels. That’s already lots of large vessels for intra-Asia, so if you consolidate to gain scale, your getting a scale is actually not that valuable and you are anyway getting this as you could lose tomorrow.|
|21:57||Tim||Well, I don’t think this is confidential, I can say that when Maersk Line took over P&O in 2005, P&O have a very large share of intra-Asia business, but because Maersk didn’t have a big focus on intra-Asia, we lost every single container in six months.|
|22:16||Tim||And we are talking 700,000 FOB of containers, gone in six months, and I think that just shows me that, you know, if you don’t have the right product and the right attention and the right pricing, the business is gone and it has gone quickly.|
|22:34||Tim||Rather quickly. So I don’t believe much in consolidation here. What I do think is very different in intra-Asia from any other markets is just tons corporation between competitors.|
|22:49||Tim||Where people help each other and share space, because you can’t. It’s the world’s biggest market. There’s so much cargo out there, so if you could improve your own cost by sharing your ship with somebody else and they can then give you a new service, which you couldn’t actually do yourself, then why not do it.|
|23:10||Tim||But you’re not really giving up on a competitor. Maybe some, a few niche ports. You can, maybe have a competitor against you , but okay, so let’s say our 10,000 portals or maybe 500 corridors that can be protected, the rest cannot. So then you might as well cover it.|
|23:27||Radu||And have access to a lot of other that collaborations.|
|23:29||Tim||Exactly. And I think, you know, that was one thing that I really have to get used to when I started at Maersk. “Whoa! This is very different, intra-Asia.” I mean, we are also feed operator, so we are faced with this situation in MCC that you know, sometimes the other carriers are our competitors, sometimes they are our partners if we cooperate and , and sometimes they are our customers if we feed up with them in smaller box, so you know relationships and –|
|24:08||Radu||It’s a very high-breed –|
|24:03||Radu||Rather changing dynamic ).|
|24:02||Tim||It’s a totally different mindset on how you interact in the industry compared to the other trades.|
|24:09||Radu||And a little more interactive. I mean, yeah, interconnected and interactive.|
|24:13||Radu||Then Ricardo Daza was asking and Ricardo is from a different continent, so he’s asking “What advice would Tim give to logistics professionals looking to develop and improve relationships with suppliers and service providers specifically intra-Asia?|
|24:31||Tim||Yeah, Not sure I understand the question 100%, but it actually gives me the chance to talk about partnership, because I actually didn’t mention this before when we talked about what MCC did differently, but when we set up MCC, we have to come up with this, of course, you need like a tag line, slogan, and we spent a long time thinking about that and came up with your “Intra-Asia Partner”.
Initially, actually the thought was because as I mentioned before, we are both competitors, partners, customers for a lot of entities in the industry in Asia, but quite quickly I realized that in Asia.
It’s like a little similar to South America. I worked two years in Argentina and their relationship is also incredibly important, but I realized that this work partnership is actually something that you can turn into some kind of competitive advantage and something that I definitely needed to rethink from my 18 years in Maersk Line, because out here in Asia, the shipment relationship and the partnership feeling that you need to have with your customers, with your suppliers, with yes sometimes even competitors and even government institutions is unbelievably important.
It took me probably a couple of years before I actually realized that I wouldn’t admit, but this is one of the reason I’ve been traveling. You know, there was one year where my secretary who what is she called? She takes care of all my business cards and she said “You do now that this year you got more than 1,000 business cards. Just this year.”
|26:34||Tim||And I thought okay, that’s a lot in one year. Actually I think it’s one of the reasons why we are seen as a very approachable and actually as a partner. You know, people use this partnership left, right, and center.|
|26:53||Radu||Yeah. It’s an empty world unfortunately.|
|26:54||Tim||It’s an empty world, so we are actually dead serious about – I always believe that, you know, there cannot be a winner and a loser in a partnership. That’s not possible, because then the loser will at first possible opportunity leave the partnership.|
|27:14||Tim||And then what’s next to a partnership? Right? So we in MCC sometimes forgo short-term profit I would say, with the mindset of a long-cut term partnership.|
|27:29||Tim||And same goes with our relationship with terminals. You know, terminal is a big part of our –|
|27:37||Tim||Ecosystem and we pay a lot of money to terminals. Too much if you ask my honest opinion, but again they have to live and what we try to do with them is while we would say “Okay, we’ll pay you this if you can do this for us.” I mean, again, talking about win-win scenarios, so I don’t know where Ricardo is from in the world, but if he was coming to Asia, my strong recommendation would be to create as many personal relationships as possible and share insights. I’ve really seriously tried to understand the drivers of the other person, because everyone has their own picture.|
|28:21||Tim||Right? I mean you might think you know something, but you got to put yourself in the other one’s shoes. Okay. Because it doesn’t matter what you believe. What matters is what the other one perceives as being the truth. Right?|
|28:38||Tim||And we have to understand that. You really have to.|
|28:41||Radu||Yeah. I mean how can you bridge the gap. Great topic of partnership. I mean, it’s a divided continent. It doesn’t work long-term. It doesn’t work, especially in the interconnected space of intra-Asia, you cannot. Because I mean if you screw somebody today –|
|29:05||Radu||They will do the same for you tomorrow. I mean, it just doesn’t work, so yeah.|
|29:09||Tim||And you know, I think one of the issue is that sometimes people think that they didn’t do anything to screw the other person and they might not understand. And what I keep telling my own staff is, but it doesn’t matter what they think. What matters is what the other party thinks, so whether you think you’ve done something right or wrong, it doesn’t really matter, because if the other party thinks that this was not right or something is wrong, then that’s what matters. If we want a business dealing with that person, then that’s not partnership.|
|29:40||Tim||It will never embark in a win-win like that, so think rather on what the perception is and that goes for actually anything in life. What is the perception of the other person rather than what you think is right.|
|29:54||Radu||Hot topic and I think it speaks for a lot, and I think this is a buzzword that everybody or a lot of people use – Block Chain. So the question is how will Block Chain affect and change the shipping value chain and what it needs to happen for it to change the shipping industry.|
|30:13||Tim||I mean, I was the one to learn more about Block Chain to be honest, but I think MCC has maybe taken a slight back step and let Maersk fund a lot of various projects with Alibaba and with IBM.|
|30:31||Radu||With IBM, it’s the famous one.|
|30:32||Tim||It’s the famous one. There’s actually a YouTube video. I thought about it.|
|30:36||Tim||Which I have seen and you know, first of all, I maybe not enough familiar with it and secondly, I think we are just at still the learning stage, because this is an institute, also just to learn. The only thing I can say is just there is an incredible amount of bureaucracy and paperwork in shipping that I don’t think people actually understands and if shipping, in general, could be made just slightly more seamless, it would make life so easy for so many people. The only thing to be aware of is, of course, that a lot of people is involved in this today. In shipping goods from A to B. Anything from customs, quarantines –|
|31:27||Radu||Authorities and ports.|
|31:28||Tim||Inspects and ports, anyone and of course, the more people and paper you take out of that equation, the less people have work and that is maybe how they serve their family and greater livelihood in the country there, and of course, that can be, I would say, not a restricting factor because this is going to happen definitely.|
|31:57||Tim||But maybe a delaying factor.|
|31:59||Tim||Because people, of course, will fight if you stand to lose your job.|
|32:03||Radu||Then, I mean, there’s going to be some deep social implications to actually across-the-board technology. I mean, slowly permeating all these industries and definitely, block chain lead to that, but indeed, it would be better without so much paperwork.|
|32:20||Tim||Most definitely. I mean some of it is ridiculous.|
|32:22||Tim||It really is ridiculous. And it just raise frustrations.|
|32:28||Tim||Yes. I mean this has to happen.|
|32:30||Radu||Yeah. “Even the strong increase in volumes and stagnant freight rates, who do you think will be the winners in the intra-Asian container trade?”|
|32:42||Tim||I should say MCC. Everything else would be disappointing.|
|32:48||Tim||I mean, hey, it’s a difficult market and of course, many players and we have asked also as many times, you know, so how can we differentiate ourselves. I think the winner will be those that can actually differentiate themselves, one way or the other, because you will have between 5 and 10 shipping lines, who has the same freight rate. Similar ships, similar transit sign, similar closings.
Everything is similar, so who will the customers choose? I think definitely technology and digitization is something which maybe not yet, but soon will be a differentiator. I think those shipping lines that actually truly can make life easy for the customers. Truly, so that the customers really see evaluate it. I think definitely they will benefit. Then, I mean, for all shipping lines, what we call the unit cost.
Basically, the total cost of shipping a container, which also depends on the cost. What you can actually do is fundamental when the freight rates are very low as they are in intra-Asia. I hope also that reliability, at some point in time, will become more important and more value to the trades. I think at the moment it’s maybe not, because you know, the shipping lines with three to four sailings a week, so if you’re Monday sailing is delayed, there’s another ship Tuesday or Wednesday morning and, therefore, reliability is maybe a little less important in intra-Asia for a lot of goods than some of the other trades, because the frequency is so strong.
MCC is a quite reliable shipping line, because of all our feeding from Maersk and all other shipping lines, so we have to be on time in the hot ports as it’s called, so for us, it’s a differentiator, but I just don’t think the intra-Asia market values that so much.
|34:58||Radu||You’re right actually. The more time will go, the more it’s going to become important.|
|35:07||Radu||Back to the point, because it fits in the next question. “In terms of technology, what do you think the technologies that would really have the most impact for shipping in the next years.”|
|0:21||Tim||I mean, if we look at the travel industry and the bank industry where everyone is doing everything by themselves now. You know, if a shipping line who come up with something where you have an e-Commerce platform, where the containers automatically assigned to a booking that comes in immediately, so the customers can actually, you know –|
|35:49||Radu||See where it is, exactly. Yeah.|
|0:21||Tim||Well, see what it is, it has been able to do for a very long time, but you know, when you make the booking, there are still people in the backend that has to allocate a container and so on to that booking. If that could be totally automated. I mean, just like when you book with an airline and then you have a seat, and you even have 23-seat immediately, and then you actually don’t need any more interaction with that airline.
If we could get to that in shipping, I think that could be a major winner, if somebody could do that. I think this thing Maersk has just announced also for refrigerated container. This remote container management –
|36:39||Tim||Where you can actually see the temperature of your – You can see a snapshot of the temperature of your container with your goods inside, no matter where this is in the world. I mean, it’s actually will going to be easy.|
|36:51||Tim||Absolutely amazing. I mean, if I were shipping fruits or bananas from the Philippines to China, I mean –|
|36:52||Tim||Yeah, but I mean, that’s happening already, but now you can follow the process.|
|37:07||Tim||It’s one of those people worries that fruit or refrigerated taken out of the equation and actually, I think there’s even a premier version offered where if you pay a little, you can actually even download the data yourself. You don’t just get the snapshot, but you actually can download and keep the data. I mean – And that’s an amazing development and I know it has taken Maersk several years to do and, of course, a lot of cost. If you need to have that ship into all the containers, but it’s just one of those things that really improves the shipping of refrigerated containers, so I mean, the actual innovations coming and those people who can come up with innovations, again a lot of it in the digitized space, I have to say.|
|37:53||Radu||So increasing the digitalization, visibility –|
|37:58||Radu||Traceability, transparency of course, and plus, I mean, as you said it has probably cost a lot of now today to have those units, but in one year, two years. I mean the cost per unit goes down a year and there was a conference last week TechX in Singapore. They talked a lot about technologies in logistics and shipping. 3D Printing for example, I mean, the cost for –|
|38:20||Radu||One of those things were I don’t know, thousands of dollars. Now, it’s $500, so…|
|38:27||Radu||That we will continue see the cost going down, but indeed, where was going to be the first among the first to implement it? They would be winners.|
|38:30||Tim||I’m glad nobody asked me about the effect of 3D printing to shipping, because I think that is still an enormous question mark.|
|38:38||Tim||That even I have myself, you know, and people are very split on this, so –|
|38:45||Radu||Yeah, very interesting. Now, if you would be an investor, if you had the, you know, one of this private equity companies, which shipping-related startup would you invest in? Is there any name that would come to you?|
|38:55||Tim||I would not want to give any names. That’s for sure, but there’s a lot of interesting going on in the digitization space.|
|39:07||Tim||And I think one of the places where I think carriers maybe going a little wrong is that they try to develop their own fantastic e-Commerce solution and I don’t think that’s what the market wants, and I also don’t think it’s a solution of the future. I think the solution is more portals, which can actually cover all the carriers. You know, like in agodahotels.com or whatever, right? Where even there you can find Expedia and Trivago, and so on, so I mean, the winner will rather be those portal, so customer exit and they has to go one place, and if you have the whole thing covered, nothing –|
|39:52||Tim||Actually, not just shipping lines. I’m also talking here, you know, custom brokers, maybe even forwarders, basically the whole chain, you can do it.|
|40:07||Tim||Yeah and then you can choose, you know, who you want to use, and I think all the money carriers are spending developing their own portals. I mean, hey this is just my opinion and I’m not an expert, but this is just my view. Those portals will be nothing else that connected through the real portals that all people, all customers actually would want to use. I don’t think customers would want to go to the carriers’ websites, really. Customers want to have an alternative. They want to have five or six choices and that they can get in an aggregator portal.|
|40:49||Tim||In terms of hardware, I mean, when you look at it, I mean who makes the money these days in the supply chain? I mean let’s just face it, it’s the terminals, so I still think if I had a bunch of money, I still think –|
|41:05||Radu||Put it on the terminal?|
|41:06||Tim||I mean the returns I believe –|
|41:11||Tim||Quite a bit better and it’s more stable, but hey, terminals also have risks.|
|41:18||Tim||And who knows –|
|41:18||Radu||And now you have all these natural disasters happening, as well.|
End of Part 1
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[00:00] Radu: And to kind of link through the last segment and a couple of short questions on the personal notes as well, right? Then we talked about learning. We learned about keeping ourselves flexible about kind of being prepared for jobs that don’t even exist. How do you learn? I mean, do you have some very specific practical information websites. How do you get information? How do you keep yourself in touch with the new developments? How do you learn?
[00:31] Radu: It’s a loaded question. I guess I like to focus more on specific resources. Maybe there’s a specific website.[...]
[00:00] Radu: Now kind of moving slowly to the other segment which is around people talents. How do we address the global shortage of supply chain talent? Should the company start developing in-house talent and training programs to fill in the gaps? How would you do it? Obviously, talent sourcing is quite difficult nowadays, that’s why we still make money at Morgan Philips. What’s your thoughts on it?
[00:30] Paul: Well, we talked about how the industry’s going to change. But in order to get the new talent for our industry, we have to change the perception of our industry. So in supply chain Asia which Paul Lim and with Robert Yap and our board, we’ve had that discussion.[...]
Radu: We are happy to have together with us today, Paul Bradley, Chairman & CEO of Caprica International. Paul is a long-serving supply chain professional having worked for many years for large logistics companies around the world, including Li&Fung and Arshiya in India, as well as shipping lines like NYK, APL. Paul is an entrepreneur and industry influencer, and a globetrotter. He sits on the board of supply chain Asia. He’s an independent director of OpenPort; serves on the executive leadership council for the Thunderbird Business School; is a CEO mentor to several SMS & tech startups and a very interesting guy. So Paul, welcome and it’s a pleasure to have you here.[...]
Radu: Hello everybody and welcome to our second episode of leaders in supply chain and logistics podcast. We’re delighted to have together with us today Charles Charles, Global CEO of DHL E-Commerce. Charles is a proven expert in supply chain international shipping and e-commerce with over 33 years of industry experience across Europe, Asia Pacific, Americas and Africa. Charles, welcome and thank you for joining us.
Charles: Thank you.[...]
I got SHOCKED!
Just had lunch with the CEO of a multinational company. After a couple of decades with the company, he decided to step down.
Having announced his departure, what happened last couple of months shocked him!
Tens and hundreds of people messaged him to say “Thank YOU”. Tens of people cried when they heard the news. One colleague he had not spoken in 15 years called him to tell him how much he had impacted his career and life.
In a word, he was positively shocked!!
I asked him why. His response:[...]