Customers should find the billing and invoicing process a lot more efficient — and accurate — at the world’s largest ocean container carrier when Maersk Line completes an overhaul of its business process, including an automation project that converts the very way it does business with shippers and freight intermediaries.
Over the next 12 to 18 months, Maersk is automating the process by which customers enter orders and shipping instructions, and receive bills of lading and invoices. It plans to integrate what are now separate steps into a single seamless electronic transaction.
By doing so, the carrier hopes to eliminate much of the waste and inefficiency that plagues its current order system while allowing it to further consolidate its customer service staff, focusing it on what the company believes will become only occasional errors.
That is crucial for Maersk’s shippers, forwarders and non-vessel-operating common carriers, who have grown more vocal in their complaints about errors they find in their bills of lading and invoices. While the rate of error varies widely, the process is subject to mistakes because it is still largely done manually.
The project is part of the wide-ranging overhaul of business processes Eivind Kolding initiated when he became sole CEO of Maersk in 2007.
“We still have an old-fashioned way of doing business that we take a booking and then we need to ship an instruction and then we need a bill of lading and arrival notice,” Kolding told The Journal of Commerce at the Trans-Pacific Maritime Conference in Long Beach last month. “(There’s) a lot of process things you have there, and a lot of things that are done and redone.”
He wasn’t exaggerating. Importers, forwarders and NVOCCs report widely varying rates of accuracy in the bills of lading issued by the Danish line. “I think we have amendment ratio of our bills of lading of close to 100 percent, so we actually issue two bills of lading for every one that we need,” Kolding said. “Part of it is (getting) customer information correct and part of it is on the carrier side. We can do much more there.”
To overhaul the carrier’s business processes and make them more efficient, Kolding introduced a companywide program called “Process Excellence” that is similar to General Electric’s culture-changing Six Sigma methodology.
“We’re looking to build improved workflow systems that will make it easier for customers to do business with us,” said Tom Sproat, senior vice president of Maersk Line’s North American customer service.
|He said the company already is rolling out a workflow system where customers can see their orders, bills of lading and invoices online and follow any rates they are disputing so they can see “when they can expect things to happen.”
Here’s how the order process works now: Customers reserve space through many entry points based on their preference, including the e-portal INTTRA, EDI, Maerskline.com, by e-mail and by phone, which the carrier must enter manually. Customers, who can track the entries online, then give the carrier separate shipping instructions detailing what is in their containers.
That, in turn, generates a bill of lading with a freight rate based on what is being shipped, and where. Finally, the carrier’s system connects the bill of lading with the freight rate and the route to generate an invoice on its own system.
Shippers complain the several steps leading up to getting their bills of lading frequently results in shipments being “misrated” — that is, given the wrong freight rate — which they must scramble to correct before having to pay the invoice in order to get their containers released.
“Isn’t there a better way to link all that data up progressively than the piecemeal approach we have today?” Sproat asked.
Maersk has invested huge amounts of money in its base enterprise systems, such as SAP, over the last few years and continues to invest in changing the front end of the process to make it easier for customers to place their orders, track them through the system and get an accurate invoice — all electronically.
“The one thing we’ve learned through talking to our customers about the design of the system is that there is no one customer type,” Sproat said. “Every customer is different, so we have to be able to deliver invoices through multiple channels. We want to be able to deliver more individualistic solutions depending on how that customer wants it.”
Automating the system also will allow Maersk to reduce the manual processing of orders. “I don’t see why we need to have a lot of people on our side and on our customers’ sides to engage in what could be handled more and more automatically via the Internet or via EDI or some other automatic means,” Kolding said.
“Where you really need customer service,” he said, “is to handle what could be called exception-handling, so that when something goes wrong — hopefully very little, but things will go wrong now and then — then you need to have customer service staff that is experienced and proactive with the customers out there dealing with the issues.”
Contact Peter T. Leach at email@example.com.