Ports and All

Global Product Supply Management runs its own transport division, making it a rare industry presence given its line of work. Earlier this year it celebrated its 20th anniversary by investing in a showstopping new Kenworth T909 prime mover.

Many businesses in the ultra-competitive freight forwarding segment outsource their road transport needs to a third party.

Sydney-based freight forwarder, Global Product Supply Management (GPSM) incorporates a bespoke fleet of commercial vehicles, 12 in all, moving containers from Port Botany to its yard and for clients around the state, making it something of an exception to the rule.

Outside of Sydney, where the company employs around 50 people, it employs a traditional model with subcontractors working under the GPSM banner.

This year marks the twentieth for the company locally. It was founded in 2002 by Bill Alexiou and Lisa Harriott both of whom remain directors today. Bill and Lisa had previously worked together at another freight forwarding company.

Combined, the leaders at the company, including other senior managers, amounts to well over 140 years.

In an era of crippling supply chains and skyrocketing operational costs, GPSM is in an enviable position that it can draw upon every one of those years of experience.

The name of the business derives from its inaugurated model of helping importers better manage the supply of their products, not just their shipments.

“We felt that the customer service for that last mile was almost more important than getting it here on a ship,” says Bill.

For a while there the business dabbled in opening an interstate office which, ultimately, wasn’t pursued when it was decided Sydney operations alone had more than enough opportunities and electronic lodgements to cater for all interstate customers.

Six years into its existence GPSM did purchase a small husband and wife transport business.

“They basically had two trucks and from that we built it up only to satisfy the needs of our clients so we focused on that as a key driver to improve service,” recalls Bill.

“We didn’t want to get too big. With transport there’s always something happening — fines, accidents, drivers off. You’re throwing money at it all the time. It’s a very hungry capital-intensive beast, but it’s a beast our customers need us to manage and manage well.”

The business prides itself on its interactions with suppliers. Instead of servicing customers just on the purchase order level, particular emphasis is placed on the type of products being shipped.

It differs somewhat from most freight forwarding models in which the shipper, once they know when the goods are ready, simply retrieve the goods to ship them out. GPSM, as Bill explains, goes one step back in the process by providing efficiencies for clients in man hours to manage those purchase orders.

“Some companies report we are saving them one or two people in manpower because of what we’re doing for them,” he says.

“Our clients are very happy with our delivery targets that we meet and our KPIs. We’re very much proactive when it comes to communications with our clients which I think is very important. We’re finding we’re getting a lot of referrals because other businesses, which aren’t so proactive and are more reactive when it comes to communication, are getting found out due to the breakdowns in supply chains globally.”

Many companies on the GPSM radar are asking their peers in the same segment for recommendations in the wake of being let down by their providers.

The resulting trend for GPSM, according to Bill, is a lot of additional business.

“That will continue so we’re looking to keep on doing what we’re doing. It’s a successful model,” he says. “If we’re going to do anything it’s going to be involving our technology side which will be ramped up so we can be even more efficient and bring those efficiencies through automation to our clients.”

The fleet consists of mainly prime movers, most of which are 600 horsepower Volvo FHs, with a pair of Tautliners assigned to LCL air freight, a 450hp Volvo FM and a new Kenworth T909.

The Kenworth, which is pulling A-doubles from the wharf at Port Botany, making it unique in Sydney alone for its individual specification, has been added as a commemorative vehicle to recognise the company’s 20th anniversary.

Because it is ferrying A-double skels between the port and Eastern Creek, the only Kenworth of its kind to do so, the vehicle has needed to undergo several modifications through its design and build stages.

The 30-metre allowance in Sydney nominally prohibits bonneted American trucks like this from operating in such an applications on the wharf. Designed in collaboration with Gilbert and Roach to ensure it met the requirement, the Kenworth T909 has undergone a host of interesting changes including a shorter wheelbase so that the front of the skel could be shifted all the way forward. A day-cab was also imperative.

The air tanks on the chassis had to be moved to the rear as there was no room under the chassis for them to go in the usual spots.

The 7-inch chrome exhaust stacks have been shorted to 4-metres from 4.2m to ensure the truck has no challenges accessing service stations.

GPSM provides daily services to Lithgow, Newcastle and the Central Coast. The trucks, for those familiar with the topography, therefore, venture over mountains, sometimes three times a day.

As a challenge it poses little issue for the Volvos working regional and interstate linehaul.

“I’m really happy with the fleet we’ve got,” says Rob Sullivan, GPSM Transport Governance & Compliance Manager. “It’s diverse and we’ve got a good variety of trailers and services from the dock. A lot of trailers we’ve investing in are interchangeable. There’s rollback skels and lift-on, lift-off Carrier Eco-Drive GenSets. For the size of the fleet I’m really proud of the volume of work it does.”

Volvo FH prime movers en route to Port Botany.

Finding drivers is an ongoing hurdle industrywide. For smaller fleets there are inherent challenges when absences hit.

Keeping the mobile assets active can be difficult especially given the procession of containers coming into the country.

In order to attract more talent, GPSM is offering its drivers a finder’s bonus for any personnel they bring on who stay for at least three months.

“The driver who comes on board gets a bonus and the driver who found him gets a bonus,” says Bill. “The other big problem we’ve got in the sector is empty container parks. A lot of the places are full. Sydney Ports has introduced a penalty system for shipping lines to make sure they get rid of the empties. From what I’ve heard from people that are in the know, shipping lines find ways to get around that. Transport companies are being told, ‘sorry, we’re not taking any more,’ and are trying to find somewhere else to go. Who pays for that? There’s a lot of that that is impacting the transport industry as well.”

Freight forwarders had fallen prey to shipping three containers, say from Europe, in lieu that they might not receive one every month.

This contributed to lack of space on vessels and a dearth of empty containers according to Bill.

“But by the time the thing gets here you’re still hoping that you’re going to get rid of those three containers,” he says. “Then you find you’ve got one still sitting on the shelves.”

As rail represents a big part of the daily business processes, affording it more efficiencies across the operation, GPSM uses the LINX unimodal system regularly.

Shipping rates have fallen drastically over the last few months. Moving a container in the Pacific is down to USD$2260 in October from nearly USD$13,700 back in January.

“That’s an indicator that demand is not there like it was,” says Bill. “We’re in our peak season. We should be getting peak season surcharges and all sorts of stuff but we’re not. If anything we’re seeing that rates, across numerous origins, are starting to fall. I think China is down around 50 per cent on rates for 20s and 40s to where it was. A 20 foot container maybe a year ago was between $5000 to $6000 USD. If interest rates continue to be pushed as a dampener for demand globally, we might find that it will, in itself, push freight rates down even further.”

Interest rate hikes, for the time being, continue apace.

Bill is concerned that the Reserve Bank of Australia (RBA) is not allowing the interest rate increases enough time to filter through to the economy.

“It’s a very blunt instrument,” he says. “No one has given adequate time to see what the impact of all of these things will be. How long will it be before the RBA is going to have to correct course and drop them again?”

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