SHIPPERS WEIGH MANY FACTORS IN TRANSPORT DECISIONS

SHIPPERS WEIGH MANY FACTORS IN TRANSPORT DECISIONS

U.S. shippers said their transportation choices are driven by rates, service,

size of their companies, export products, plant locations and level of international market activity.

David A. Laurine, marine transportation assistant manager for Georgia- Pacific Corp. in Atlanta, said shippers have little control over the roller-coaster rate ride, especially container rates."With containers," he told a recent Georgia Foreign Trade Conference, ''God only knows where those rates come from."

Because air takes up so much space in Lithonia Lighting's shipments, ''rates are by far the most important factor" for the Conyers, Ga.-based company, said John P. Cruikshank, international sales vice president.

Service factors such as equipment availability are important, but World Carpets Inc. of Dalton, Ga., also places the most weight on rate levels, said Mike Ford, traffic and export operations manager.

However, Mr. Ford said, World Carpets looks beyond the rate level itself to see how it stacks up against its international competitors.

The company may receive what initially seems to be a low quote on carpet moving from Savannah to Singapore, he said, but it doesn't do World Carpet much good if a European competitor's costs between Rotterdam and Singapore are 30 cents a square yard lower.

Coming down on the service side was Raymond A. Georges, export customer service and logistics manager with Buckeye Cellulose Corp. in Garden City, Ga.

A carrier can provide free transportation, but if a ship is late, the tardy delivery could destroy Buckeye Cellulose's waiting customer, Mr. Georges said.

Michael C. McCann, executive vice president and director of DaiEi Papers (USA) Corp. in Elmwood Park, N.J., also voted for total logistics service as the best means by which U.S. exporters can compete globally.

Southeastern U.S. companies are reputed to be the world's low-cost producer of forest products, but the competition in such countries as Brazil and Indonesia is driven by the need to generate foreign currency despite the cost, rather than profits, he said.

"Take your blinders off," Mr. McCann said. "Your competition in New York is not important. Your competition in Finland and Russia is."

Ocean carriers became involved in intermodalism as a means to better serve shippers by providing one-stop logistics shopping. But the shippers on the panel by and large were unimpressed.

Mr. Laurine said he doesn't see one-stop shopping as a trend that will sweep the industry, "and I don't know if it's something we necessarily want to happen."

Mr. Georges said Buckeye Cellulose seldom relies on intermodal movements. And neither does Snapper Inc., which prefers to load up to the last minute, said Kay S. Rolen, transportation and logistics director for the McDonough, Ga.-based lawn equipment manufacturer.

Moving empty containers from the Midwest to the West Coast obviously doesn't make sense, but it's up to the ship lines to persuade shippers to fill those containers, DaiEi Paper's Mr. McCann said.

The only strong intermodal supporter on the panel was Mr. Ford, who said rail landbridges provide small and medium-sized shippers exporting less-than- containerload shipments with greater flexibility and more buying power.

Also, Mr. Ford said, mingling small shipments in full containerloads could help LCL shippers to avoid liability for undercharges.

Overall, the shippers were noticeably unenthused about the International Standards Organization's quality certification program, known as ISO 9000.

"ISO 9000 is European-driven," Mr. McCann said. "If Europe backs off, (ISO 9000's) importance will lessen."

Japan isn't interested because it has its own system and the countries in Southeast Asia are implementing the standards only to survive, he said.

If the push to implement the standards remains strong, "some reality has to be put in to the ISO process" by removing governing control from local entities, Mr. McCann said.

He said that some U.S. companies have waited two or more years to receives certification, while companies in Southeast Asia receive theirs within 12 days.

Georgia-Pacific's Mr. Laurine said companies want to comply to gain a competitive edge. But what happens to that edge when all companies are in compliance?

"We may just be guaranteeing a measure of bad quality," he said.