Page 66 - FDI Alliance International Magazine Summer 2020 Digital Interactive Issue

THE VALUE OF A SHIPPER

CONSORTIUM

When shippers operate in a silo, they typically However, these groups usually have a advances ideas and knowledge to help shippers
have no one to discuss their transportation transportation committee, or even a rail make strategic choices. It allows shippers
issues, ideas, and opportunities with except for committee, that discusses and keeps track of a to share challenges they have resolved and
the carriers that are providing them a service in secondary issue that usually centers on one of opportunities they have developed to produce
the first place. This makes conversations with the their members’ highest costs. conversations at the meeting that lead to new
carriers inherently biased when it comes to difficult ideas and solutions in the transportation field that
issues that both parties do not agree on. As a The advantage of this type of transportation would not occur but for this forum.
result, many shippers seek strategic collaborative group in a trade association is the members are
relationships by forming consortiums where they all manufacturing or providing the same Shipper and Provider Consortiums
can discuss their transportation service issues to products or commodities making discussions The last type of group that a shipper may get
better understand and resolve these matters. about their transportation experiences more involved in would also include the transportation
relevant. This way, each member can fill the other providers as well. The plus side of this type
members in on what is going on in its world and of group is you may create stronger business
→ TYPES OF COLLABORATIVE SHIPPER the challenges and solutions it has found. relationships with your carriers and be able to
GROUPS THAT SOLVE INDUSTRY directly resolve issues inside the group. However,
CHALLENGES Transportation-Specific Shipper Groups the downside is shippers may feel constrained
There is a wide variety of groups that foster shipper Another type of shipper group is one that deals from complaining about their carriers’ practices
collaboration and help companies navigate their strictly with transportation issues. This type of if they are in the room.
transportation issues, each includes different group can be focused on transportation in one
players and serves different purposes. industry or include shippers from a wide variety
of industries. The advantage of this type of group → RAIL SHIPPERS HAVE A UNIQUE
Industry-Specific Shipper Groups is it focuses strictly on transportation issues as RELATIONSHIP WITH THEIR CARRIERS
The most common shipper group is usually found opposed to a wide variety of issues that trade I have the most experience in the rail industry
inside a trade association for a specific industry, associations usually cover. where the relationship between railroads and
like steel, fuel, industrial minerals, or wheat. their customers can be somewhat unique.
These trade associations are usually located in For example, the Mercury Group is an annual
Washington, DC, so they can lobby Congress event hosted by Breakthrough, a transportation Market Power Can Result in Contentious
and the pertinent federal regulatory agencies. freight and energy management company, Relations
Their focus is usually on the primary issues that that provides a platform for its clients to make It is one of the few industries where the provider’s
occur in their industries like laws and regulations informed, data-driven decisions in their supply relationship can be extremely contentious at times
about trade or how their products are made. chain. Using network data, the Mercury Group with its customers. This phenomenon occurs

66. FDI ALLIANCE INTERNATIONAL