How do you plan for future demand ? Do you use quantitative modelling with local economic indicators or is it more based on “best guess” & experience ?
It’s more the latter. At the local level, salespeople are supposed to have a very good handle of their clients’ future demand. A lot of the trade is also seasonal, and rises and falls in a correlated way (e.g. fruit exports will have good/bad years depending on climate)
When it comes to overall economic trends, I don’t really know. That stuff was handled way above my paygrade by global HQ. But it definitely can happen that a certain route requests many empty boxes to be shipped to them, only to have them sitting there because projected demand did not materialize. These kind of imbalances can be corrected by letting them drain away over time; demand doesn’t shift so much that net importer/exporter status of a region flips. This “passive” management ends up being cheaper most of the time.
Very nice post indeed.
How do you plan for future demand ? Do you use quantitative modelling with local economic indicators or is it more based on “best guess” & experience ?
It’s more the latter. At the local level, salespeople are supposed to have a very good handle of their clients’ future demand. A lot of the trade is also seasonal, and rises and falls in a correlated way (e.g. fruit exports will have good/bad years depending on climate)
When it comes to overall economic trends, I don’t really know. That stuff was handled way above my paygrade by global HQ. But it definitely can happen that a certain route requests many empty boxes to be shipped to them, only to have them sitting there because projected demand did not materialize. These kind of imbalances can be corrected by letting them drain away over time; demand doesn’t shift so much that net importer/exporter status of a region flips. This “passive” management ends up being cheaper most of the time.