As we enter year three of the COVID era, companies worldwide are grappling with an all-too-familiar array of supply chain challenges—supply uncertainties, capacity and labor shortages, long transit times, and sky-high transportation rates. Tough times call for fresh strategies. As companies seek to reboot their supply chains for better success in 2022, here are some tips on how to navigate the new normal.

1. Digitize to Manage Uncertainty. Before you develop a supply chain plan, you first need to establish certain parameters—for example, how much lead time a supplier requires to produce a product, and how much demand you expect. Unfortunately, right now, the figures that underlie supply chain plans are anything but solid.

“Supply chain organizations are faced with tremendous disruptions, just trying to respond to the variability that’s occurring,” says Mark Balte, executive vice president, supply chain innovation, at Atlanta-based supply chain solutions provider Logility.

To manage variability, collect as much data as you can about supply and demand and apply machine learning to develop a sophisticated picture of changing conditions over time.

Take demand sensing, for example. “If we put a plan in place four or six months ago, the demand pattern is going to change as we get closer to that demand date,” Balte says. The more data the company collects, the better it can predict actual demand.

“We can begin planning earlier, perhaps make a change,” Balte explains. Maybe a company expects a shipment at the Port of Los Angeles. “I was planning to move it to a distribution center in Colorado,” he says. “Now I may only want to move part of it to Colorado and some to Dallas.”

Opportunities abound to collect data that supports decisions, with new Internet of Things (IoT) devices coming on the market all the time. “But companies should begin the journey now, at least collecting data within their own enterprise, and then extending that outside the enterprise,” Balte says.

Data from publicly available sources, carriers, and IoT devices in company-owned or supplier factories can enhance the knowledge base, producing better forecasts.

2. Rate Sources for Risk. Data analytics can also help you develop more resilient sourcing strategies. For instance, Stanley Black & Decker, based in New Britain, Connecticut, analyzes risks its suppliers face due to COVID infections or various other challenges. Those risks point to potential supply chain disruptions.

“We’re able to quickly narrow down the list of higher-risk suppliers that we can evaluate much more carefully to see if their production rates have been hit,” says Guru Bandekar, chief supply chain officer for the company’s Global Tools and Storage business.

Stanley Black & Decker dual-sources or multi-sources components whenever possible. If supply from one vendor starts to look uncertain, the company can shift more order volume to a different supplier.

When dual- or multi-sourcing isn’t possible, Stanley Black & Decker maintains safety stock, setting the volume based on how long it would take to recover from a disruption. “If it will take us five weeks to re-source that part, because it takes time to get a new supplier up and running, then, to put it simplistically, we want to have five weeks of safety stock,” Bandekar says.

3. Move Your Manufacturing. Supply chain disruptions have dramatically driven up freight rates and lengthened transit times. A container shipment from Asia to the United States that would have cost less than $2,000 a few years ago cost as much as $20,000 in 2021, according to Bloomberg.com. And capacity shortages and port congestion have added weeks to the crossing.

“A shipment from Asia to the United States used to take four weeks by ocean,” says Mustafa Hossaini, business development manager at Westec Plastics Corporation, a contract manufacturer of plastic parts in Livermore, California. “Currently we see transit times of six to eight weeks.”

Since the start of the pandemic, Westec has experienced an uptick in inquiries from U.S. companies that might want to move their production from overseas to the United States.

While labor costs in the United States are relatively high, in some cases, domestic production cuts shipping costs so much that the math works out in favor of reshoring.

Hossaini cites a company whose drug delivery product uses plastic parts made in Europe. “They told us that on the last batch of products they received, the shipping costs were $8,000,” he says. “Our shipping rate to them would literally be $150, because they’re located a half hour away from us.”

Companies might also embrace domestic manufacturing to gain convenience and peace of mind, since they can easily visit a contract manufacturer to oversee quality issues and resolve problems, Hossaini says.

In addition, reshoring might eliminate language barriers. And many U.S. companies want to promote their products as “Made in America.”

Stanley Black & Decker strives to source components and assemble products as close as possible to the markets where they are sold. When local labor rates make this hard, the company controls costs through automation. Although the company has used this strategy since the advent of new tariffs in 2016, localization has grown even more important since the start of the pandemic, Bandekar says.

4. Get Flexible with Carriers. In an era of scarce capacity, shippers that strive to accommodate truckers’ needs have an easier time getting freight on the road. “We advise companies to be as flexible as possible with transit times, hours of operation, and trucks they would accept,” says Dave Menzel, president and chief operating officer at Echo Global Logistics, a third-party logistics (3PL) company based in Chicago.

Say a shipper wants a load picked up at 9 a.m., but the carrier can’t supply a truck until 1 p.m., Menzel says. If the shipper really wants that truck, it might adjust its schedule.

Shippers should also strive to get trucks loaded and unloaded quickly, to minimize downtime for truckers. “If a facility has a reputation for long lines and difficulty getting loaded or unloaded, then that facility is a lot less attractive, and trucks will choose different options,” Menzel says.

Fast loading and unloading are especially hard these days, when a tight labor market and COVID-related absences can leave shippers short-handed. Logistics managers should keep that in mind when they book appointments with truckers.

“They should be realistic about what they can load in a given day,” Menzel advises.

Shippers should also provide leeway when drivers arrive a bit later than planned. “Instead of telling them they need to get a new appointment, and the next available one is in two days, you might say, ‘If you miss your appointment by an hour, we will work you in,'” Menzel says

5. Collaborate. Good relationships with carriers and customers can also help shippers better deal with challenges such as uncertain transit times and shortages of crucial resources.

For instance, Stanley Black & Decker relies on strong partnerships with carriers and logistics providers to gain a steady flow of information about the progress of containers on the water.

“We can use that information to predict when we will get the product and then make commitments to our customers, to the best extent possible,” says Bandekar. “Customers want speed, but if they can’t have speed, they want predictability.”

The company also works with over-the-road providers to manage mutual challenges. “What can they do to get more chassis, or attract more chassis toward our supply needs?” Bandekar asks. “What can they do to attract more drivers?”

Stanley Black & Decker and its carriers hold many more conversations on such topics these days. “We are helping them prioritize, and they’re helping us understand the challenges so we can prioritize based on the changing dynamics,” he says.

Shippers may also overcome obstacles by sharing information with customers. “Don’t be afraid to discuss with customers the problems you’re facing, because they are going to face the same problems,” says Lewis Black, chief executive officer of Almonty Industries, a Toronto-based mining firm that is a major producer of tungsten.

Almonty serves customers in the electronics, medical device, aerospace and other industries. The company’s challenges these days include trouble procuring consumables such as drills, explosives and various grades of oil, as well as slow shipping, tight capacity, and high freight rates.

Sometimes, asking for a favor can help. “We ask our customers to send us a spare container if they have one,” Black says. Or, they might ask a customer that manufactures drill bits to send some half-finished drill bit or ones they are going to recycle. “Send them to us and we’ll use them,” he says.

6. Retain Your Talent. The Great Resignation has hit supply chain organizations hard. Companies, especially those involved in e-commerce, are trying to add front-line workers and new facilities to meet increased demand. “But at the same time, you have constant and accelerating workforce turnover,” says Dan Johnston, co-founder and chief operating executive of WorkStep in San Francisco.

WorkStep addresses the supply chain labor shortage with two technology platforms—Hire, a recruitment tool, and Retain, which employers use to gain insights to reduce employee turnover.

Companies have traditionally treated warehouse associates, drivers, and other supply chain workers as cogs in a machine, easy to replace, Johnston says. But in today’s tight employment market, that mindset has changed.

“If you can keep the talent you have, you have to compete less for this incredibly hard-to-find new talent,” he says. “And you can deliver more goods at a better pace to your end customers.”

WorkStep’s customers use Retain to collect feedback from employees periodically, asking their opinions on factors that affect job satisfaction. Using a mobile phone or similar device, the employee takes a minute or so to answer a survey. Retain aggregates and analyzes the results, spotlights areas of concern, and then, when the company makes corrections, tracks how those changes influence turnover.

Using Retain, a 3PL that runs 350 warehouses learned that managers in some of those buildings weren’t following correct orientation procedures for new employees. “You might see an average satisfaction with orientation of 90% across the organization, but in 10 buildings it was 50%,” Johnston says.

By correcting those and other problems Retain uncovered, the 3PL cut turnover among new hires by 36%.

7. Improvise. Beyond strategies to help navigate the current supply chain environment, companies might also benefit from tactical creativity.

Black recalls a time in the 2000s when Almonty Industries struggled with a shortage of rubber tires, which the mining company’s underground vehicles consume in large quantities. “What we came up with was very rudimentary, almost medieval,” he says. “We started making steel wheels with wooden tires.”

Almonty improvises in a similar way to beat today’s shortage of shipping containers. These are especially hard for Almonty’s European operations to get hold of, since the shipping lines focus so heavily today on their lucrative Asia-to-North America lanes.

“There are no containers around, but there are lots of old shipping containers in scrap yards,” Black says. Almonty retrieves those old containers, welds them back together and installs new, government-approved security latches.

“We have someone driving around who rings us up and says, ‘I saw an old shipping container in pieces in a scrap yard,'” Black says. “We send a truck down there, buy it, and bring it back.”

Unfortunately, once Almonty uses the recycled container to ship tungsten to the United States, someone there grabs it and the company never sees it again.

LONG-TERM SHIFT

While pandemic-related disruptions have prompted many changes, companies are not likely to revert to the old ways as the virus finally runs its course. “These capabilities we are building will be the way we operate in the new normal,” says Bandekar. “It’s a long-term shift.”

COVID has thrown a spotlight on issues that have always existed. But when normalcy comes back, other environmental issues, such as global warming and forest fires, will continue to disrupt the flow of goods.

Says Bandekar: “The way we manage our supply chains in the future will be much different from how we managed them in the past.”

Source: www.inboundlogistics.com

Image: www.pexels.com

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Whether you anticipate a retail demand surge or it happens unexpectedly, you need to be able to manage that sudden order spike in ways that don’t harm customer relationships or your bottom line.

Here are nine ways companies across the retail supply chain capture and fill orders when demand surges.

1. GO DEEP WITH SUPPLIERS.

Have “what if” conversations with suppliers. Identify the products that are likely to experience a spike, and pose surge scenarios to suppliers and manufacturers to learn how—or if—they can meet increased demand levels.

“Any company that buys anything should have conversations about what happens if demand doubles or halves,” advises Michael Zimmerman, partner and analytics practice leader at consulting firm Kearney. The solution might involve a financial investment to guarantee capacity or contracting product manufacturing elsewhere so you have options.

2. MAKE DECISIONS AT THE FACTORY.

Consider committing to factory capacity before you need it. That’s what Mark Burstein, industry principal at supply chain technology provider Logility recommends. If, for example, the manufacturing timeline for a product is three to four months, he says, a retailer might not receive a surge order until 150 days later. Booking capacity early moves your surge order ahead of others who haven’t ensured that protection.

At the same time, Burstein encourages retailers to forecast demand not just for products, but for raw materials as well, and to position those materials at the factory early. “With the materials in place, you can direct them to both high demand and most profitable products,” he says.

He also recommends saving time and touches by shipping finished goods directly from the factory, bypassing distribution centers completely.

3. PRE-SELL TO CUSTOMERS.

Taking a page from book publishers that have long used pre-orders to gauge demand for a book and determine how many copies to print, retailers of other types of products are now surveying customers to determine interest in a product.

“Retailers are getting smarter, thinking about how they can start to pre-sell and put customers in line to buy products ahead instead of waiting for a Cyber Monday surge,” says Troy Graham, vice president of business development at e-commerce solutions company Descartes Systems Group. This approach also assures customers that they will get the product, he adds.

4. PUT SOME OF THE ONUS ON THE CUSTOMER.

Third-party logistics provider Flexe is seeing results with brands that advise customers to “get it while you can.” Flexe clients using this scarcity strategy to manage demand spikes are better able to promise and then meet a customer delivery date.

“This strategy allows brands to get items to the customer quickly, but it’s also on the customer to make that happen by heeding the ‘while supplies last’ messaging,” says Megan Evert, senior vice president of operations, Flexe.

5. OUTSOURCE SURGE FULFILLMENT.

Flexe offers a launch fulfillment service designed to handle surges inherent with product introductions. Typically, the manufacturer ships inventory to Flexe facilities in multiple markets selected for their proximity to anticipated demand. “When the brand knows it will have a severe spike, we can partner and distribute the inventory appropriately so that no one site has to ship 300,000 orders overnight,” Evert says.

Outsourcing surge fulfillment makes sense for other types of situations, too. “We’re not saying outsource your entire fulfillment,” she adds. “This is a way to respond to the dynamic situation we’re all experiencing. Don’t make it harder by trying to do all of this yourself.”

6. IMPROVE DELIVERY TIME BY FILLING ORDERS FROM THE BACK OF THE STORE.

Increasingly, retailers looking for ways to get high-demand orders to customers more quickly are using a micro-fulfillment model that involves filling orders from the back of brick-and-mortar stores.

That’s what one of Pat Fitzpatrick’s outdoor action sports clients does. “A small warehouse keeps enough inventory for three to four days, but pushes everything out to stores for fulfillment,” says Fitzpatrick, vice president of sales and marketing for commercial storage solutions company McMurray Stern.

Companies can use this approach strategically according to demand locations, he says, or to improve delivery times in areas farther from a fulfillment center but closer to a store.

7. RAMP UP REVERSE LOGISTICS.

Graham sees an increased focus on reverse logistics. “As we think about spikes in volume and limited inventory, retailers are looking at returns and asking, ‘How do we get them inspected and back to sale quickly?'” he says.

Micro-fulfillment makes that easier. “If you take returns in the store, you can get the product back into inventory much quicker,” Fitzpatrick says.

8. CARRY MORE INVENTORY THAN YOU’D LIKE.

Many retailers have gone from “just in time” inventory management to “just in case,” stocking excess inventory of products most likely to benefit from a demand surge.

“The volatility and unavailability of some products has led retailers and consumer packaged goods companies to emphasize inventory over anything else,” says Zimmerman. “They want more to sell and they will pay extra for it and store more of it.”

Short-term warehouse space marketplace Chunker helps companies do that by connecting them with temporary surge storage capacity. Operating like “an Airbnb for warehouse space,” Chunker provides a buffer that lets retailers and brands stock up on inventory without committing to a long-term lease.

“Warehouse space comes with risk when companies have to sign a lease,” says CEO Brad Wright. “Shorter-term, more agile storage lets them flex their storage up and down.”

9. LET GO OF BEST PRACTICES.

Increasing inventory carrying costs and other recent survival strategies are counter to pre-pandemic best practices. “But perfection is not the goal here,” says Evert. She recommends being thoughtful about what you can do to increase the chance that the product will get to the consumer. When the best practice approach isn’t an option, consider alternatives.

“Without that, you’re losing demand,” she says. “In the worst case, you fail to realize you have to move faster and to save pennies, you lose the whole sale.”

Source: www.inboundlogistics.com

Image: www.pexels.com

The post 9 Innovative Ways to Manage and Meet Demand Surges appeared first on Cargo News Today.

The fragility or brittleness of a global marketplace so deeply dependent on just-in-time inventory. Any event, whether a pandemic, hurricane, or a container ship stuck in the Suez Canal, creates immediate disarray. In response, retailers have reverted to “just-in-case” practices, building up large safety stocks. It has become a choice between risking a stock-out or keeping costly excessive inventory. Where is the balance?

—Joe Dagnese
President and CEO
PECO Pallet

Supply chain professionals should use the experiences of 2020 and 2021 to take a fresh look at their supply networks, understand their vulnerabilities, and then take the appropriate actions to improve resilience. Doing so can create competitive advantage; failing to do so leaves an opening to the competition. Supply networks may contain potentially crippling risks, and organizations must identify and remediate them.

—Oliver Lemanski
CEO
OnProcess

Close coordination and support throughout every point of the supply chain is the new normal. Disruptions have had a lasting impact on customer confidence. Detail-oriented supply chain management, enhanced customer service, and data-driven inventory decisions are essential to reestablishing a chain of confidence.

—Angela McNally
Vice President, Global Provider Solutions
Owens & Minor

The supply chain is ripe for innovation. A singular disruption impacts a sequence of events, creating inefficiencies. The positive outcome of this unprecedented market cycle is collaboration across the supply chain resulting in technology solutions. This improves productivity by getting goods to shelves efficiently on a go-forward basis.

—Blair Blake
VP, Carrier Strategy
Arrive Logistics

I’ve learned not to take consistent air and ocean supply chains for granted. The past two years have been inefficient, making delays commonplace and causing deficits and surpluses of inventory due to increased freight costs. The solution is to stay informed and listen to suppliers, freight forwarders, and consumers.

—Richard Huang
CEO
Cloudious9

Flexibility in planning beats perfect execution. The market is in flux; the businesses succeeding are the ones adapting to what is being thrown at them. If I’ve learned anything over the past two years, it’s that perfectly planning for the long term doesn’t necessarily lead to success.

—Sean Elliott
Chief Technology Officer/Chief Digital Officer
Körber Supply Chain

Our reliance on a few key ports and jobs (dock workers and truck drivers) highlighted our supply chain fragility. It only takes one or two bottlenecks to have ramifications and ripple effects throughout the entire economy.

The recent supply chain challenges also demonstrated how critical the ports of Los Angeles and Long Beach are specifically to the United States—these ports are in earthquake-prone regions, and a large earthquake impacting one or both of these ports could make COVID-19 related challenges seem more like a nuisance than a major disruption.

—Megan Linkin
Senior Parametric Nat Cat Underwriter
Swiss Re Corporate Solutions

The companies that succeed are the ones that communicate most effectively. Because there are so many players (vendors, manufacturers, 3PLs, carriers) and software all working together to run a supply chain, the companies that create a common vision, communicate the vision, and hold all parties accountable to the same standard are the ones that have adapted to the pandemic successfully.

—Keith Moore
Chief Product Officer
AutoScheduler.AI

Inventory is not necessarily the “evil” that supply chain professionals once thought. Having distributed inventory in strategic locations at an inventory carrying cost that does not burden your balance sheet can be the key to supply chain resiliency and winning.

—Tom Nightingale
CEO
AFS Logistics

Having the right systems and technology matters. The supply chain changed in a hurry, our systems and technology helped us to adapt quickly with it. We were able to quickly identify obstacles and overcome them. By embracing forward thinking, we were able to limit the impact of supply chain issues.

—Lonny Holston
Export Operations Coordinator
Mickey

Two things we have learned: We must: 1) understand data to minimize risk and 2) identify weak spots in the supply chain to improve workflows. Organizations that have met the challenge of the past two years have done so by making calculated investments in technology and processes to limit disruptions.

—Mark Casiano
SVP, Sales, Marketing & Customer Experience
Odyssey

The past two years exposed infrastructure cracks in our industry—specifically when looking at effective capacity at ports and equipment availability. Simply adding more ships and more containers will not get us anywhere if there is not more capacity in the system to receive those containers.

—Nathan Strang
Director, Ocean Trade Lane Management
Flexport

Visibility is vital. The shortages of raw materials and extended supplier lead times have drastically increased stock-outs. You need complete visibility of 1) inventory indicators to ensure you can meet demand and 2) knowing how well your suppliers perform.

—Ara Alec Ohanian
Group CEO
NETSTOCK

We need to fully digitize our supply chains if we want them to be resilient in the face of unexpected disruptions. By unifying our digital systems, applications, and processes, we will be able to efficiently manage supply chain operations.

—Antony Francis
Supply Chain and Logistics Consultant
Endava

Retailers need better information to navigate quickly. As supply chain bottlenecks have impacted every retail touchpoint, winning means knowing your options and what the market is doing. With AI-driven market intelligence, brands can make better and faster decisions to deliver great customer experience and grow revenue.

—Juliana Prather
CMO
EDITED

We learned how to stand up brand new distribution operations in new markets at warp speed. In some cases, we went from no market presence at all to lease, equipment, and team in place and completely RF-integrated in just three weeks. We also delivered a building five months ahead of schedule.

—Dale Young
Vice President
Warehousing & Distribution
World Distribution Services LLC

The pandemic is by no means a short-term crisis event. Its impact on the work of people and the functioning of the supply chain in the organization will be long term. Therefore, in order to effectively confront the challenges of the future, the business must increase long-term resilience along the entire supply chain. To do this, supply chains must leverage platforms that offer access to applied analytics, AI, and machine learning solutions, and provide end-to-end transparency.

—Dmitri Fedorchenko
CEO and Co-Founder
Doft

The retail supply chain can no longer be protected from the impacts of omnichannel. The volume of omnichannel purchases and fulfillment has grown to the point that retailers can’t treat it like a rounding error. They must make supply chain strategy and network changes or risk losing their shirt—literally and figuratively.

—Nikki Baird
VP, Retail Innovation
Aptos

The most surprising lesson I learned was how much the supply chain relies on commercial uplift. The airlines fly passengers all over, and airline companies reserve space for cargo on commercial flights.

We saw firsthand how much companies relied on airplanes, so when the pandemic hit, and there were fewer flights happening, that contributed to the bogged down supply chain. As more passenger flights come back, that has the potential to ease supply chain challenges.

—Dustin Hansen
CEO
InXpress

The magnitude of disruptions supply chains faced over the past two years demand rapid innovation. The world around us has changed fundamentally, so legacy systems and their outdated approaches no longer serve supply chains well.

Adapting an adage, futility is doing the same things and expecting the same results, even when the underlying assumptions have shifted. Supply chain leaders who have digitally transformed their organizations are the ones positioned to address emerging trends, mitigate risk, and identify new opportunities.

—Polly Mitchell-Guthrie
VP, Industry Outreach and Thought Leadership
Kinaxis

Adaptation is absolutely critical. You have to offer substitutes, source creatively, have a plan B and maybe even C, and be vigilant in getting accurate data.

—Kevin Ledversis
Sales Director
Newcastle Systems

It’s more important than ever to “architect” agility into processes. The growing complexity of supply chains introduces plenty of opportunities for things to go awry. The more shippers can digitize and standardize manual operations, the better equipped you are to pivot when needed and keep shipments moving.

—Virgil Ferreira
COO, Rate Management
Magaya

The pandemic highlighted the need for a much closer relationship between manufacturers and their 3PL partners. We are working more closely with our partners than ever before—developing innovative and collaborative approaches to tackling these new, longer-term challenges.

—Jim Saponaro
President, Life Sciences & Healthcare
DHL Supply Chain

Relationships now are more important than ever. Whether it’s developing partnerships with secondary and tertiary suppliers to meet rising demand, or managing the expectations of vendors and customers during challenging times, the importance of establishing and cultivating strong, lasting relationships cannot be overstated.

—Jonathan Parks
Senior Vice President, Supply Chain
iGPS Logistics

Amateurs hunt dollars, professionals hunt relationships.

—Whit Smith
Director of Operations
TA Services

We need to be able to plan and face the consequences that result from the consolidation trend of brands and businesses. Consolidation has caused massive inefficiencies and created a lack of options due to the absence of competition. Many companies have benefited in the short term from these mergers but do not recognize their role in the supply chain or do not plan accordingly.

This has resulted in practices that can be monopolistic in nature and can have disastrous results in the operation of the chain, especially for smaller brands and product lines. However, big actors, who have actively promoted mergers and consolidations did not realize—maybe until very recently—that their operations are at risk as well. Until these larger groups and brands realize that their practices have affected the overall functioning of the global supply chain, logistic partners need to be prepared for disruptions.

—Eric Gomez
CEO
maxiaNET

Source: www.inboundlogistics.com

Image: www.pixabay.com

The post What is the biggest supply chain lesson you learned from the past two years? appeared first on Cargo News Today.

A burning question facing retailers is if and when customers will return to purchasing in stores similar to pre-pandemic patterns rather than buying nearly anything and everything online.

Historically, many shippers have bifurcated their buying decisions, supply chains and fulfillment strategies based on sales channels, which generally provides a lower cost basis when done well. However, to thrive today, retailers must embrace omnichannel fulfillment strategies.

Looking ahead, omnichannel optimization will be critical to current business models. Newly defined consumer behaviors will meet and synthesize with various buying patterns. In some industries and within certain demographics, e-commerce may retain its status as the primary buying channel. In some situations, however, there will be a reversion to a combined model of traditional brick-and-mortar retail and e-commerce. It is crucial for retailers to be more agile to meet customer expectations within a variety of purchasing methods, whether online, a mobile phone app or in-store.

Automated fulfillment solutions support the demand for speed and accuracy. Automated technologies, such as put-to-light walls, sorters, conveyors and pack-and-apply machines, can offer faster and more efficient handling of units while reducing the demand on teammates to perform highly repetitive tasks.

The pandemic has underscored automation and robotics can provide a defensive strategy to supply chain disruptions caused by the lack of labor availability.

Here you can read opinion articles about automation and is the future really so bright as it seems.

RETHINK DELIVERY STRATEGIES

Many retailers were surprised by the capacity constraints in the parcel delivery network at the onset of the pandemic created by the influx in online orders. In the past, the emphasis was on securing the lowest cost with the best incentives, typically through one parcel provider. However, in order to best address network constraints moving forward, shippers need to adopt a more diverse delivery strategy.

For many, this means using multiple national parcel delivery carriers along with regional providers. This ensures they have the capacity to get their products to the end consumer when needed to create a satisfactory purchasing experience.

Additionally, we continue to experience capacity challenges out of Asia. The pandemic reduced capacity at a much quicker rate than the reduction of trade demand, increasing freight costs and decreasing transit reliability.

Ongoing port congestion is forcing many retailers to consider air transportation. Because passenger belly space remains lower than pre-pandemic levels due to limited international travel, retailers are renting entire cargo aircrafts to help offset capacity issues.

With this in mind, it is critical brands rethink delivery strategies. For many, this means shifting from a single-source supply chain to establishing multiple manufacturing centers with their own supply chains and delivery strategies in order to be more agile.

By embracing an omnichannel mindset, automation technologies and diverse delivery methods, brands will have the strategies in place to best navigate unexpected logistics logjams in the future.

Source: www.inboundlogistics.com

Author: Josh Jungwirth, EVP ofFreight Forwarding, GEODISin Americas

Image: www.pexels.com

The post How to Combat Logistics Logjams appeared first on Cargo News Today.

The acquisition, which is part of a broader strategy to expand and diversify MICCO’s growing vehicle fleet, boosts its local final-mile vaccine delivery capability to over 1.1 million vaccine doses per day.

The addition supports the work of the Hope Consortium, an Abu Dhabi-led public-private partnership developed to respond to one of the greatest logistical challenges in history by delivering large quantities of COVID-19 vaccines locally and globally from its hub in Abu Dhabi.

Expansion of the fleet extends Abu Dhabi Ports’ scope of services, as well as its range of supply-chain solutions for last-mile delivery certified by licence from the Department of Health – Abu Dhabi (DoH).

Robert Sutton, head of logistics cluster, Abu Dhabi Ports, commented: “The investment in advanced technology places Abu Dhabi in a strong position to not only offer extended services to its healthcare sector partners, but also fulfil the goal of the Hope Consortium to end the pandemic and help chart a sustainable pathway to recovery.

“Abu Dhabi Ports is committed to diversifying and extending its logistical solutions to accommodate all types of vaccines on the market through our specialised final-mile fleet. By working closely with the Department of Health – Abu Dhabi (DoH), we are ensuring that MICCO is equipped with the most advanced chilled vehicles currently available on the market, elevating our emirate’s logistics capabilities for years to come.”

Equipped with complete data loggers and advanced temperature monitoring, the brand-new fleet will be capable of carrying vaccines, medical equipment, or pharmaceutical products from Abu Dhabi Ports’ 19,000 sqm cold and ultra-cold storage facility located at Khalifa Industrial Zone Abu Dhabi (KIZAD) to healthcare centres across the UAE.

The fleet has been fitted with cooling equipment to support handling of vaccines requiring a temperature range of 2°C to 8°C, as well as -80°C with the addition of specialised packaging.

Clifford D’souza, Executive Vice President and COO, MICCO Logistics, said: “This significant investment serves to boost MICCO’s overall capability to transport vaccines and other sensitive pharmaceuticals to all corners of the UAE safely and efficiently, and across a wide-range of temperature bands.

“Our ability to incorporate advanced digital systems that provide for monitoring and tracking in real-time, assures our customers, including hospitals, clinics, vaccine centres, and testing centres, full product transparency and integrity. Through these solutions, we are positively reinforcing Abu Dhabi’s supply chain and its capability to tackle one of the greatest challenges of our age.”

Image from pixabay.com

The post AD Ports expands vaccine supply chain solution appeared first on Global Cargo Insight.

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The carriers must observe their passport validity periods

Restitution of borders between UK and EU is not only a story of changes in customs work, fees and tax calculations, and other money-related issues, but it also includes a lot of small details, which were previously ignored by the carriers, but now have become critically important.

For example, the validity periods of ID documents and amount of time that UK drivers can spend in EU and vice versa. As stated on the official UK government website, the UK drivers that enter EU must have a passport that is valid for at least six months. Every UK citizen can stay in EU without visa on a condition that he/she does not spend more than 90 days in EU during a 180-day period. It means that every carrier must calculate how many days their employee (driver etc.) has spent in EU at any given time. It does not matter, if the port or airport is located in EU, the countdown begins as soon as you cross UK/EU border. From the 1st of October citizens of EU, EEZ countries and Switzerland will need to present their passports to enter UK. ID card will not be considered as a valid travel document anymore[1].

The number of documents required to cross UK/EU border has also significantly increased. Official UK institutions remind us that from the 1st of January movement of goods across UK/EU border in any direction is to be considered as export and import simultaneously. It means that all documents related to transport and entry of goods from one area into another must be filled and completed. Free movement of goods has ended here. This will create a great load for British ports and airports since all cargo from Europe goes there, while the goods from UK can go in various directions, which distributes the workload of document inspection.

Same old story

It became clear very fast, during the first days of January, that none of the parties have been completely prepared for the new order – institutions, cargo operators, carriers, export/import companies. Nobody. Preparation for the 1st of January was also affected by the chaos at UK/EU border at the end of December, which was caused by EU closing borders with UK due to fear of spreading the new COVID-19 type. The carriers were still processing the “Christmas jamboree”, but the 1st of January was already here – complete BREXIT.

Businesses felt consequences of BREXIT already in the first week – food deliveries were delayed due to issues with customs documents, logistics companies stopped sending goods, while the retailers found out that their delivery chains might have become obsolete[2]. After ten years in close cooperation the UK and EU carriers were suddenly forced to learn a lot in a very short time.

As stated by NewYork Times[3], a couple of days after the 1st of January the European delivery company DPD said it would stop sending packages from UK to the EU until at least the middle of next week as it tried to figure out new cross-border systems. While the retailer Mark&Spenser announced that due to the border crossing issues stores in Paris will not receive deliveries of fresh salad other food products from UK, while also saying sorry to their customers for limited availability of goods due to UK/EU imports legislation.

First to crack were the seafood (crustacean) producers and suppliers. On 18th of January, they came to Westminster to protest bureaucracy of BREXIT, which has caused delays of cargo deliveries to EU, which resulted in a lot of damaged goods and significant losses. Producers of crustaceans have calculated that currently delivery to the client requires 48+ hours, while previously it took only 24 hours.

Representatives of one company were delayed for 30 hours in France to fill 400 forms for one cargo of crustaceans for ten clients in Spain, said “Venture Seafood” director Garry Hodgson[4]. Before BREXIT most of the deliveries required a document of supply, but now each shipment requires an export health certificate, fishing certificate, customs permit, safety documents etc.

In addition, any carrier of mixed or combined cargo can be held at the border due to a single box having improper documentation. Due to this the importers have started to pay additional fees for empty trucks to ensure that the goods through Eurotunnel are delivered on time. This resulted in a movement of partially empty trucks between the countries. It also increases the number of trucks on the roads, because a cargo that could be previously transported by a single truck now is transported by two or even three trucks.

While waiting for the chaos on the borders to subside, many EU carriers have reduced or stopped deliveries from UK, which often results of empty trucks returning from UK to EU. The companies are willing to pay for the trucks to return empty because it is cheaper than to get stuck for 4-5 days in another country.

How will BREXIT affect the shipping industry?

Right now, probably no one can answer this question. Experts are studying data and making estimates, but none of them are optimistic. For example, survey by the Chartered Institute of Procurement & Supply shows that already in January drivers spent 3-5% more time at UK border than before. The experts warn us that the delays will only increase and create real problems both to the carriers and manufacturers of fresh products. Survey results also showed that more than a half of UK companies that import or export goods to EU have had delayed deliveries in January, mainly, due to additional paperwork.

The German logistics software company Transporeon tracks cargo truck movement in Europe in real time. Software Live Tracker summarizes GPS data and shows, how many time trucks spend in lines at each point of crossing. The executive director of the company Stephan Sieberi stated that: “a truck has value only if it moves”. If every day 10 000 trucks spend an additional hour on the border, it means that 10 000 truck working hours have been lost. “Waiting time increase by 5-10% in the port of Dover is a significant indicator for the logistics services providers”, said S. Sieberi.

In the middle of February BBC stated that the British government thinks that the worst has passed and that the total cargo flow has reached the levels of the last year[5]. BBC data shows that outgoing train traffic in the beginning of February was at 98% compared to traffic in February last year, while incoming land vehicle traffic reached 99% compared to the last year. Approximately 80-90% of trucks arrive to the border prepared for the new situation. Truck traffic from Kent to EU by ferries and through Eurotunnel in January and February reached 67% and 82% compared to the 2020. Ferry companies do not keep track of empty returning trucks, the estimates say that approximately 50% of trucks returning to EU are empty. French sources state that around 50-60% of trucks in Eurotunnel are empty. Before Brexit, the number of empty trucks has never exceeded 30%.

It is obvious that changes introduced by BREXIT and unusual effects of COVID-19 will continue to affect the shipping industry, thus all of the parties must actively follow the current trends and be able to quickly make decisions in these very volatile conditions.

Image by Elionas2 from Pixabay
[1] https://www.gov.uk/guidance/transporting-goods-between-great-britain-and-the-eu-guidance-for-hauliers-and-commercial-drivers#drivers-documents-licences-and-permits

[2] https://www.nytimes.com/2021/01/09/business/Brexit-British-economy.htm

[3] https://www.nytimes.com/2021/01/09/business/Brexit-British-economy.html

[4] https://www.theguardian.com/politics/2021/jan/18/fishing-trucks-protest-at-westminster-against-brexit-red-tape 

[5] https://www.bbc.com/news/business-56044610

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