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Case Study

Damco

NVOCC’s NYSHEX strategy pays off for clients
during the 2018 peak season.

The Challenge

In an ordinary year, the Transpacific import peak season is especially intense for Damco. Their multimillion-dollar accounts include the largest of the big box retailers. Every year in the months preceding August, September and October, they get a flood of customers who are desperate for help getting their cargo on Transpacific eastbound vessels from Asia to U.S. ports. Typically these BCOs have existing service contracts, but their needs during the busy season exceed carriers’ available space. Damco is challenged each year to not only reserve space, but also to prevent their clients’ containers from being rolled.

This year in addition to the usual scramble for space, Damco and the rest of the market had impending trade tariffs to contend with. Matthew Koivisto, Head of Ocean Product, East Area, Damco, described the challenge this way, “This peak season, in particular, we kind of had a perfect storm where the rush to get ahead of the tariffs that are taking effect caused a large number of our customers to accelerate their booking thereby sort of advancing peak season a little bit and condensing everything into a very small window. So it created a bit of a mess earlier and more suddenly than we might normally have expected.”

The NYSHEX Solution

Luckily for their customers, Damco had laid the groundwork well before the season by using NYSHEX to anticipate the annual spike in demand. They approached a few of their large BCO accounts for whom they handle other services like origin supply chain management, customs house brokerage (CHB) and airfreight and proactively proposed NYSHEX as a solution.

According to Koivisto, “We wanted to make sure that none of our clients had a problem finding space, that we had a ready-made solution for them. So this year we didn't wait for peak season. We started early on with our sales team and account managers in particular just to make sure that they understood they had a solution in place.”

He said that in past years, the best Damco could do for customers was make an expensive FAK booking and hope for the best knowing that half the time that booking might get rolled.

Thanks to NYSHEX, Damco has found a more secure way of offering a booking this peak season that they know is going to sail. And their strategy paid off better than expected when trade tariffs were announced. After the Trump Administration made the first-round of announcements, Damco saw a huge increase in demand for service from Asian ports to the U.S. West Coast from customers who already had shipments in their supply chain and wanted to get them into the country ahead of the tariffs taking effect.

Damco's Results

Damco’s NYSHEX strategy provided them with a creative and innovative solution to their customers’ space needs during the busiest time of the year. And in the case of those who wanted to beat the trade tariffs, Damco was able to save them a lot of money. Proving themselves invaluable to their space-pressed accounts was only the beginning of their results.

Damco ended up as one of the top movers of cargo on NYSHEX this season. By figuring out how to leverage NYSHEX Forward® contracts for the season and customers’ tariff-related needs, they added to their sales considerably. In addition, Damco has benefitted from the clear visibility of digital contracting which makes it easy to keep track of what they’re doing and know exactly what they are buying—a huge improvement over past years’ efforts which involved purchasing premium FAK services primarily via phone and email.

With NYSHEX’s reasonable and reliable contracting alternative, Damco and its customers were able to ride high throughout the extraordinary uncertainty of peak season 2018.

NYSHEX
“Now we've actually got a more secure way of offering a booking during peak season that we know is going to sail and a lot of our customers are starting to embrace that.”
Matthew Koivisto
Head of Ocean Product, East Area

Takeaways

Top Benefits Realized

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Guaranteed space provides certainty
for customers during peak season

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Digital contracting provides
clear visibility

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NYSHEX Forward® contracts provide flexibility to secure ocean space 2 weeks to 6 months out

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