Steering to a New World Order at PPI TS18

By Kenneth Norris, Deputy Editor, IFPTA Journal

LIVERPOOL, UK, Oct. 9, 2009 (Viewpoint) - The thinking in the industry has changed - no more business as usual. That message was clear from speakers and delegates alike during the four-day PPI Transport Symposium 18 in Liverpool, England. Whether the response by the industry was too slow, or could mistakes have been avoided entirely, are questions largely left to the theoretical. The debate now centers firmly around how to tailor business strategy to meet the "new world order," in part brought on or accelerated by the crisis, and how to better prepare for the future.

Rod Young: "A bit more optimism"

Leading the conference program, titled "Steering the Right Course to the Future," Rod Young, RISI Economic Advisor, portrayed a much more optimistic picture overall for the forest products industry over the next 2 - 3 years than had been projected only six months ago. In some sectors, such as fiber and recovered paper, the improved forecasts signals good news for the transport industry. However, much of the growth will be in fiber imports driven by the Asia and other developing countries, with North America and Europe leading exports for recovered paper. In other sectors seeing lagging or slow growth, such as paper and board in the developed world, the bread-and-butter for the traditional trade lanes, many companies will need to make drastic modifications.

What else are you doing?

Taking advantage of these new global changes means more than just cost-savings. "What else are you doing?" was a question asked to many of the conference speakers. Flexibility was one answer. Being able to react quicker to fluctuations in the market, instead of waiting too long or hoping things turn around. And being able to handle a wide diversity of forest products, instead of tied to only one or two. But in such asset-intensive industries as forest products and transport, turning on a dime is not as easy as it sounds. While improving flexibility is a realistic short-term goal to achieve for producers and logistics companies, shipping companies must have a longer vision.

A better approach to investments was another answer. All of the speakers agreed that access to capital has dried up for the near future and the era of cheap money may be at an end. Investments must now be directed to the processes that directly lead to improving efficiencies of existing structures, such as reducing fuel consumption and optimizing operations. And in many cases, apart from the expected cost-savings, these optimizations can lead to a distinct competitive advantage.

Finally, sustainability is no longer just a buzzword. Speakers from across the board pointed to their company's plans to add or increase sustainability initiatives. Although some complained the current market is actually hindering many companies from going green, most realize that the new order expects sustainability to be included in any strategy. And this extends not just to the ports or the vessels, but across the entire supply chain. On this front, new technologies still hold the best promise. But many speakers admitted that those technologies must prove themselves before companies will be able to incorporate them anytime soon.

More collaboration

Change is hard, especially for the specialized industry of forest products transport; a phrase mentioned more than once during PPI TS18. Forest products and transport are notoriously unstable industries. Peaks and valleys are merely part of the cycle. All agreed it will take an industry approach to put most of these answers in place. If the mistakes of the past are to remain in the past, the industry's players must find better ways to collaborate through the good times and the bad.

The exhibition and conference attracted more than 600 delegates from 30 different countries