Operators leaving customers unhappy: CEVA boss

Customers let down by transport carriers and logistics providers who are failing to deliver new innovation, CEVA says

By Jason Whittaker

Customers are being let down by transport carriers and logistics providers who are failing to deliver new innovation, according to the global boss of CEVA Logistics.

John Pattullo, the CEO of the world’s fourth-largest logistics group, has told the biannual Smart Conference in Sydney the industry has under-invested in research and development to drive productivity initiatives in transport and distribution.

He says most of the major logistics gains in recent years have been made in-house by manufacturers, not by specialist transport and logistics providers, and customers broadly are unhappy with service levels from the third-party sector.

"Our business is supply chain – we should be maestros at it," he told the conference.

He believes "open book" contracts don’t foster innovation, while the low margins most of the industry operates on means providers "don’t have the firepower" to invest in new strategies.

And he says not enough providers offer basic customer service.

"We won’t get the bold ideas unless we fix the basics," he says.

Speaking later to ATN, Pattullo urged providers to partner with their customers, academic institutions and other groups to foster innovation.

The global logistics market is down about 30 percent due to the economic crisis, he says, but tighter operating conditions prompt greater interest by businesses in outsourcing their task to cut costs.

Pattullo says CEVA is concentrating on improving the share of business from its 100 biggest customers. These customers make up more than half of CEVA’s revenue but on average only spend 10 percent of their logistics budgets with the company.

Meanwhile, CEVA’s Australian Managing Director Howard Critchley has told ATN sub-contracted road carriers are being supported with any necessary rate adjustments.

"We pay for fuel completely," he says. "We truly know the costs of running a truck."

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