Shippers Providing Carriers Rolling Forecasts

Shippers Providing Carriers Rolling Forecasts

Several large shippers say they are now providing rolling forecasts of their demand outlook to improve coordination with ocean carriers following supply and demand disconnects in recent years.

Officials at Wal-Mart, Sears and Electrolux told The Journal of Commerce’s annual Trans-Pacific Maritime Asia conference this week the forecasts are aimed at allowing container lines to better plan their operations, and to ensure they have capacity in place in when needed.

Forecasting is the missing link here,” Rob Kusiciel, vice president of inland transportation at Wal-Mart told the Shenzhen event. “We spent a lot of effort in the last two years looking at what is important for vessel operators, so we have started giving operators an eight-week rolling forecast, and we are turning out to be 95 percent on average accurate with the projections.”

Forecasting was one point of contention during the volatile shipping markets of 2009 and 2010, when the deep recession pushed ocean carriers to idle vessels at an unprecedented rate. A sudden upturn in demand in early 2010 had shippers struggling to find capacity to get their goods to market.

Richard Smith, vice president of transportation at Sears Holdings, said the retailer is preparing four-week rolling forecasts in a challenging retail demand market. “We have good accuracy, in the 90s, and obviously get more accurate the closer we are to the target date,” he said.

The forecasting, he said, is a critical part of the retailer’s efforts to maintain tight inventories.

Bjorn Vang Jensen, vice president of global logistics at Electrolux, said the appliance manufacturer provides 12-week rolling forecasts. “That’s the minimum that we believed would be meaningful with a reasonable degree of accuracy,” Vang Jensen said at the Shenzhen meeting. “We think it’s an important effort to undertake.”