Guest Blogger, Rich Chrzanowski — Container volume at US ports hit an all-time high in 2014 and a DOT transportation study projects volume to more than triple in coming years. Compounding the problem is the emergence of megaships which are taxing the aging infrastructure of US ports leading to long back-ups for trucking. The cherry on this sundae of woe are the ongoing labor disputes at West coast ports. Shipping delays are expected to cost the retail industry $7 billion this year and as much as $37 billion by 2016. There are creative ways retailers can mitigate the awful impact of these conditions, but only if they are maximizing their utilization of cutting edge transportation management solutions. Here are three ways retailers can minimize the pain at the ports.
Improved Supply Chain Planning for Inbound Logistics
According to Journal of Commerce port productivity data, burgeoning ports like those in Savannah, GA and Charleston, SC have made infrastructure investment a priority. As a result they are better equipped to handle megaship traffic. However, it is not easy to quickly transition from distribution strategies built around receiving at ports in Long Beach and New York. With a robust transportation planning and optimization application in place, forward-thinking shippers can upload rates for carriers that serve alternative ports and optimize routes in unfamiliar lanes. Also consider negotiating rates with regional carriers and leveraging optimizers to get more creative with planning of alternative lanes/routes.
Shipping delays are expected to cost the retail industry $7 billion this year and as much as $37 billion by 2016.
More Proactive Carrier Management
Shippers with stronger established carrier relationships enjoy greater loyalty when capacity grows tight. Developing healthy relationships with the carrier base can be accomplished numerous ways. Timely and informative training on the IT systems the shipper has implemented and configured is one factor in fostering healthy dialogue, reducing friction between shippers and carriers. Providing constructive feedback on performance to carriers is another way TMS data can be leveraged to promote positive dialogue. Select a TMS solution that includes web-accessible carrier portals to help carriers maximize the efficiency of their interactions with the shipping organization and earn “shipper of choice” status with your base of carriers.
Leverage TMS Software to Support Changes to Ordering Patterns & Schedules
Back to School season orders typically start in late June for early September delivery. With TMS-driven visibility into the ebb and flow of peak season and corresponding capacity, shippers can begin ordering more core items sooner. If it is cost effective to do so, and given the earlier ordering, shippers may consider changing the port(s) into which they ship ocean freight. Again, having a robust TMS and optimizer implemented makes it easier to execute such changes. Shippers may also consider sourcing more of their products domestically instead of from overseas. While the cost of domestic goods may be higher, the savings on lead times could mean having “hot products” on store shelves in time for peak season while competitors may not. The profit margin may be smaller, but the value of satisfied customers cannot be overstated.
Richard Chrzanowski is an accomplished supply chain and transportation executive with deep expertise in managing inbound logistics for the retail industry. He has held positions as Director of Transportation for Modell’s Sporting Goods and Inbound Manager for Linens N Things.