I interviewed Eric Zeitouni who discussed How the Financial Crisis of 2008 Affected the Global Supply.
What is your view on how the financial crisis from 2008 affected the supply chain?
Hi Dustin, thank you for having me. Well, the supply chain of 2008 really changed the landscape of how people conduct their commerce. For example, efficiency has become the primary concern of most supply chains. So with that, what has happened is you have a different array of changes that have occurred. For example, weight limits have become astronomical. So what that’s meant is that people are loading more weight and more product onto their loads to be more efficient. And in turn, what that’s done is created issues on the back end of the business.
That’s interesting. Would you say that the crisis is over?
That is a good question. I believe that yes, it is recovering, and it has been good growth these past few years, especially on the East Coast where there’s been double digit growth on all the East Coast ports in the past four or five years. Even though it is over, though, you still have a lot of importers and exporters that have changed the way that they conducted their supply chain, and that has been solidified. So you don’t have people going back to the old, I would say, normal ways. The new trends that everyone has adapted to have become the norm. Which is one of the reasons why if you see now what’s happening with a lot of the major shipping companies in the world, is they’re trying to implement export mandatory scale tickets, which is going to throw a wrench at the entire changes that have occurred this past seven years or so.
What should supply chain managers do to prepare for possible future crises or to deal with the past one that still has its effects?
Right, so that’s the interesting thing, which is one of the things that has changed, back to the original question that you asked on what has changed. So what you have now is you have importers and exporters trying to cut out one stop in their supply chain. So for example, you’ll have clients that would say OK, usually we’re shipping X to customer A, and they’re taking half a load. What if we were able to push a full load to them and then we could send an entire load, and then this way we could cut out one of the stops, which will basically cut out handling, storage, transportation, etc., etc.?
What are the positives of this change?
Well, the positives of these changes, it depends where you stand in the supply chain. So for someone like myself whose in the procurement and transportation and handling business, it’s gotten good for us, because what you have is you have more demand for bigger jobs.
Do you have any final recommendations?
Right now we’re in a very, you know it’s a highly regulated business right now. So it’s really tough to say. I mean, we’re all in the mercy of what the laws are at the end of the day. So whatever the laws allow you to do is the best that you can do as far as trying to keep your supply chain as efficient as possible. So it’s really tough to say. It really depends on your industry, whether you’re selling, whether you’re importing and distributing sugar or plastic or paper, it really all comes down to who your customers are, how you’re currently operating, and so forth.
Where can a supply chain manager learn more about the options available? For example, you mentioned some of the laws.
Right. So I mean, the laws, when I meant the laws, I mean you have regulation coming down now on transportation companies that are basically trying to accommodate their customers. Now the transportation companies are the ones that are taking the hit on anything that happens, because they’re trying to be loyal to their customers. So it’s basically give or take. It’s up to transportation companies to decide hey, I don’t want to work with these companies because they’re breaking too many laws, and every time I have mentioned it to them they’re not informing on their fears. So a lot of it is back and forth. So if you have a lot of people that are, like for example, I get approached by a company that recycles paper, and they have loads that are north of 57,000 pounds. So in order to conduct or facilitate a load like that going, you know, for an export, it would need to be very in the close proximity to the pier. So what you have now is a lot of transportation companies that, throughout these couple years, have gotten burnt and there’s less and less of them, so now these exporters are having a hard time finding capacity, and they have to change the way that they do their regular business.
How do you see the economy developing potentially in 2016?
Like I said, I’m really gung ho and excited about it. Like I said, this past couple years, all the East Coast ports in the United States have experienced double digit growth. You know, this past four or five years, and you know, our phones are ringing off the hook. We have a lot of demand that we can’t fill a lot of capacity. So we’re really trying to increase our capacity to keep up with demand.
Can you also provide a brief background of yourself?
Sure. I started out in the industry about ten years ago, working as a clerk. I’ve always been fascinated with the supply chain and logistics business. I was promoted a couple times to associate operations manager, and then I was working in two different companies that are not existent anymore. And we have launched our own business two years ago, myself and a couple members of my old team. And we have been in the industry trying to add value to supply chains with our, old fashioned values and our new-minded technology.
And thanks, Eric, for sharing today.
Absolutely, Dustin. Thank you as well.
About Eric Zeitouni
Operations Manager at Ellison Smith Logistics