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Speaker 1: Need to talk about difficulties in international trade. Details beginning

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Speaker 1: to emerge on the scale of the rebuild required after

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Speaker 1: the collapse of the Francis Scott key Bridge in Baldemore.

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Speaker 1: Officials estimating your replacement could cost at least two billion dollars,

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Speaker 1: while ensurings there facing claims of as much as three

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Speaker 1: billion for cargo on board the ship. According to Barclay's analysts,

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Speaker 1: one detail that remains unknown is how long it will

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Speaker 1: take to reopen Baldemorre's port and how that could affect

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Speaker 1: supply chains along America's eastern seaboard. Joining us around a

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Speaker 1: table for some insight is the CEO of DSHAW Supply Chain,

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Speaker 1: Oscar to bark Oscar. Good morning to you, sir, Thanks for.

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Speaker 2: Being with us, Good morning, pleasure to be here.

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Speaker 1: Just how far down the supply chain you expect to

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Speaker 1: see some impacts, some ripples, consequences fall out from what's

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Speaker 1: developed this week.

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Speaker 3: Yeah, the thing is is.

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Speaker 2: The main impact of this one is more in the

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Speaker 2: oldomotive fall off. It's less on the container part. Of course,

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Speaker 2: there is a container element in there. Actually, we got

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Speaker 2: a few containers on the ship as well, which we

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Speaker 2: need to manage at the moment. But I think if

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Speaker 2: you see one thing we were discussing that earlier, If

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Speaker 2: you see one common theme in supply chain management over

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Speaker 2: the past four years, is that ability to fast respond,

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Speaker 2: that agility to fast make changes into how supply chain

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Speaker 2: is organized. And I think that's what you're going to

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Speaker 2: see here as well. You're going to see a shift

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Speaker 2: from container movements from this port to other ports. You're

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Speaker 2: going to see So I think while the impact to

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Speaker 2: the board itself is draumatic, While obviously the event itself

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Speaker 2: is tragic, but the overall impact on the global supply

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Speaker 2: chain and the US supply chain I think will not

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Speaker 2: be as large as as you would fear.

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Speaker 1: You mentioned you've got some containents on the ship. Can

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Speaker 1: you just walk as through how those conversations go in

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Speaker 1: the last couple of days, what communications like. Yeah, I don't.

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Speaker 2: Obviously not been directly involved in the discussion on that,

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Speaker 2: but I mean it's a few containers, so it's not

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Speaker 2: compared to the number of containers we have there. But

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Speaker 2: one of the things you need to make sure of

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Speaker 2: how we get them released and how we can find

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Speaker 2: alternative roots for them, how we make sure that our

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Speaker 2: customers can plan the products that are in their alternative fruts,

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Speaker 2: alternative plan alternative products, so to keep those supply chains running.

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Speaker 2: And I think the main I was saying that probably

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Speaker 2: a last interview with with with actually with Bloomberg at

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Speaker 2: the time, Verre said there is something around the corner

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Speaker 2: in supply chains every time, we just don't know what

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Speaker 2: it is. I couldn't have guessed that now we will

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Speaker 2: be talking about obviously this event. And I think one

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Speaker 2: of the main things that you see is that both

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Speaker 2: are customers and ourselves, but I would say everybody working

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Speaker 2: around supply chain, but actually also everybody working in other

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Speaker 2: parts of our customers is now far more attuned to

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Speaker 2: having to respond fast decision making, using data to make

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Speaker 2: sure that we can have the alternatives and fast found

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Speaker 2: alternative solutions how to manage supply chain, because I think

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Speaker 2: this is one of those events that they're treated that

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Speaker 2: there will be happening.

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Speaker 4: Which raises a question of how much you have to

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Speaker 4: sort of create redundancies inherent in your supply chains and

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Speaker 4: in your system in order to be flexible to handle,

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Speaker 4: say a two hour delay because you've got to go

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Speaker 4: a different route around Baltimore and get into Washington, DC.

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Speaker 4: Things that seem like they'd be disasters if I were

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Speaker 4: traveling with my kids, but you have to manage and

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Speaker 4: make the time. See, they seem the same.

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Speaker 2: Yeah, And I think that is a very important point.

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Speaker 2: Where in the past, let's say more than four years ago,

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Speaker 2: it was all about just in time, right, it was

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Speaker 2: all about having the lowest stock levels possible, having the

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Speaker 2: most efficient and cost effective supply chain. What you know,

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Speaker 2: as you see, is it's far more about the resilience

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Speaker 2: of supply chains to make sure that they're organized in sucuated.

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Speaker 2: You can respond to these things because if you've got

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Speaker 2: your minium stock levels then obviously a two hour delay

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Speaker 2: is actually dramatic. If you make sure that you build

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Speaker 2: a supply chain and sucuated you can respond to that,

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Speaker 2: it already helps. And I think that's something that you

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Speaker 2: see happening at the moment, is that rather that the

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Speaker 2: let's say the minor cost is the main thing. Now

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Speaker 2: it is making sure that supply chain keep running because

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Speaker 2: many of our customers have now realized that supply chain

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Speaker 2: is more about availability and making sure that you can

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Speaker 2: continue to serve customers rather than only having minimal levels

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Speaker 2: of minimum costs.

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Speaker 4: Does this make the just in time promise that so

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Speaker 4: many the companies we're trying to offer less of a

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Speaker 4: possibility or even a desired outcome and more just a

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Speaker 4: resiliency and the ability to be flexible much more of

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Speaker 4: the priority.

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Speaker 2: I think it's exactly it's the availability of products which

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Speaker 2: comes more, far more the priority than purely dies in time,

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Speaker 2: because what we all have learned is that the cost

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Speaker 2: of a disoptimized supply chain because of an event is

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Speaker 2: way higher than having a five or ten percent lower

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Speaker 2: higher stock level. Now, obviously with two day's interests and

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Speaker 2: stock levels have become obviously more relevant to reduced those

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Speaker 2: and that's I think where also the whole element of

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Speaker 2: data analytics, converting into II, converting into genitive AI come

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Speaker 2: in as well to make sure that we plan supply

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Speaker 2: chains real time better and better on the use of

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Speaker 2: data and also on the use of historical data. And

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Speaker 2: there's a lot of historical data in the past four

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Speaker 2: years that helps us to learn and how you can

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Speaker 2: respond to things.

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Speaker 3: We're make shipping so complicated is because secretary people just

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Speaker 3: talked about this yesterday. There's no like air traffic controller

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Speaker 3: like there is for flying. When it comes to logistics,

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Speaker 3: when it comes to shipping, how can technology change that

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Speaker 3: to make it more transparent.

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Speaker 2: Well, when we talk about port control, there actually is,

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Speaker 2: so in for instance, I ports, there is a traffic

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Speaker 2: control and the connection between the ports. So I think

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Speaker 2: I think in shipping it's more advanced than than it

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Speaker 2: makes it seem. And I think some of the elements

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Speaker 2: that you could see in this event as well is

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Speaker 2: that they have been able to respond pretty fast to

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Speaker 2: avoid even more dramatic events because of a good communication

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Speaker 2: that I was so, but you're right. The use of

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Speaker 2: data and is fast evolving. And one of the things

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Speaker 2: that you see in general in the logistics sector is

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Speaker 2: that the amount of investments that goes into the sector

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Speaker 2: compared to four years ago is exponentally more. That means

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Speaker 2: that the amount of innovation in the sector is experientally more,

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Speaker 2: and that you see that in data, in what we

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Speaker 2: can do with data and what we can do with datalytics.

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Speaker 2: You see that in robotic solution and other innovations. So

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Speaker 2: therefore you see a fast evolvement. I would say internally,

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Speaker 2: I always say that if you look at the last

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Speaker 2: four years, the speed of innovation in the logistics sector

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Speaker 2: compared to the ten years before is mind bugging. So

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Speaker 2: it is so that is actually which helps us to

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Speaker 2: further increase and improve compared to the airline industry, where

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Speaker 2: you see the opposite.

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Speaker 3: When you look at the communication between the government people

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Speaker 3: are judge again today, I mean being shippers and supply

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Speaker 3: chain logistic partners. How has that communication been between the

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Speaker 3: public and private.

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Speaker 2: In these type of events. I think the collaboration between

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Speaker 2: public and private. But if you take, for instance, the

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Speaker 2: example between ports, because ports is in some cases public,

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Speaker 2: some cases private, some case the mix of the mix

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Speaker 2: of both, I think there is a good interaction. But

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Speaker 2: I think if you look at the speed within which

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Speaker 2: that have as involved on the business side, so for instance,

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Speaker 2: now the interactions with companies is far more on sea

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Speaker 2: level than where that before would be two levels levels down,

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Speaker 2: because CEOs and CFOs of our customers see the importance

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Speaker 2: of being very close of what's happening in supply chains,

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Speaker 2: because that's a differentiator in your profitability, your market share,

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Speaker 2: your growth. I think gradually governments need to make that

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Speaker 2: same step to make sure that to understand how important

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Speaker 2: it is for the success of the economy to really

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Speaker 2: be close to the infrastructure, and that's not only hardware,

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Speaker 2: but it's also software, and those investments need to come

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Speaker 2: from there as well.

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Speaker 1: You talk a lot of band building and resilience. When

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Speaker 1: we look at supply chains, particularly over the last few years,

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Speaker 1: things fail quite franchile from your perspective, but things more

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Speaker 1: franchile and more resilient over the last few years post pandemic.

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Speaker 2: I think they are there. To put to use different words,

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Speaker 2: I think the capability to respond to the unexpected has

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Speaker 2: evolved enormously. The only point is that the unexpected happens

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Speaker 2: more than in the past, so I think it has

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Speaker 2: improved a lot, and that is because of bigger investments

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Speaker 2: the view of necessity of having those capabilities. But on

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Speaker 2: the other hand, the number of events is evolving faster

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Speaker 2: than the development of the sector. But I must say

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Speaker 2: if you look at if I talk about DHL, but

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Speaker 2: also talk about the market in general and our customers

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Speaker 2: and the capability of responding to things has evolved enormously.

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Speaker 4: So does that mean that you're able to charge more

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Speaker 4: and that shipping will in general cost more Because building

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Speaker 4: and resilience is expensive charge more and.

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Speaker 2: Cost more too, different things right, because I think what

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Speaker 2: you see is that because the professionalization of the sector

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Speaker 2: has evolved and therefore the value that it brings has evolved,

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Speaker 2: So it might be that there is a higher price

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Speaker 2: to pay, but actually the best and the fit might

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Speaker 2: also be higher, so that that doesn't necessarily translate in

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Speaker 2: higher costs because the efficiency might be improved as well.

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Speaker 1: Ask a thoughtful stuff. It's going to see you. Thanks

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Speaker 1: for the update. K you ask for the box there

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Speaker 1: The CEO if DHL supply Chain