Bottlenecks & Equipment Shortages Threaten Christmas
What Can You Do?
Authored by Dan Everson, from
Insight Sourcing Group’s Logistics Center of Excellence
The world is in a mad scramble to obtain containers to load their goods and then—somehow—find a way to achieve a decent transit time to destination. It is no magical revelation to say the ocean industry is experiencing record costs and record frustrations. But what can you do about it?
Strategic planning for peak season 2021 is over and the impact is now being lived and experienced…in most cases painfully. There are lessons to be learned and corrective actions to be taken to position yourself better for the immediate and long-term future:
- Shipper Contracts. If you have attempted to ship your goods utilizing the carriers’ contracts, you are likely taking on incredible risks with little benefit. Liabilities are on you and your containers are likely getting “rolled” at the port IF you get a container to load. Take back control. Create your own agreement and negotiate this contract with the carriers.
- Minimum Quantity Commitment (MQC). If you have a contract, ensure the terms are being met and that you work with your carrier to provide additional flexibility with that MQC number. With a good relationship in place, a carrier will more often work toward mutual success if there is some level of commitment from both sides.
- Be a Carrier Favorite.. Find way to improve your operating efficiencies so that it is easy to do business with your company. Extended receiving windows, Live unload (or as quickly as possible), volume estimates shared in advance with the carriers for equipment needs, and other characteristics of an efficient operation will allow you to make your cargo “more attractive”.
- Have a Flexible Distribution Network. There may be advantages to shift ports from USWC to USEC/Gulf at times. Have intermodal, trucking and or rail agreements ready to shift that route to be able to avoid congestion or natural disasters (wildfires, floods) that may occur on your “normal” route.
The concepts mentioned above might be new strategies to you and ones you wouldn’t be comfortable setting into motion on your own. If you need assistance with executing creative and innovative supply chain strategies to either increase your capacity and/or build a more reliable network, Insight Sourcing Group is available to help. With over 30 years of experience in various stages of supply chains, our Logistics Center of Excellence can help make the big issues you’re facing more manageable.