When an item really, really, really has to get there—and fast—critical shipment service providers spring into action, STAT!
Shipments don't get much more critical than the transport and delivery of human organs. Just ask Roger Brown, organ center manager for the United Network for Organ Sharing (UNOS), Richmond, Va. UNOS holds the federal contract to administer the Organ Procurement and Transplantation Network, which facilitates nationwide organ matching and placement via a computer system and 24/7 communications center.
Unprecedented challenges such as slowing economies in Europe and the United States, fuel cost inflation of 60-plus percent, and a steep decline in the value of the U.S. dollar are having far-reaching effects on ocean shipping. The cost of moving a container from China to the United States, for instance, has tripled since 2003.
In the face of these challenges, ocean carriers are throwing out lifelines to shippers, working with them to solve problems, create solutions, and address the difficulties of cost inflation and business slowdowns.
One of Brown's key responsibilities is ensuring that an organ, such as a heart or kidney, is transported from the donor site to the recipient's hospital as swiftly and safely as possible. "It's precious cargo, and we need to respect that," he says.
Although Brown's needs are unique, all critical shipment customers share his concerns to some extent. Whether they are transporting human organs, automotive parts, perishables, or business documents, companies expect their critical shipments to be handled efficiently, securely, safely, and, most of all, quickly.
"Just about every organization will require fast service, if only occasionally," notes Erik Van Baaren, logistics and express services analyst with Datamonitor, a London-based business research company. Companies operating in the automotive, maintenance, electronics, and financial industries, however, tend to be mainstays of the critical shipments market.
These industries have different needs. Automotive, maintenance, and electronics companies may have to ship a particular type of component to a manufacturing or service site, while financial industry companies often need to get contracts and other documents into the hands of clients and business partners with minimal delay. "But all industries share a common goal: they want their shipments to move both quickly and reliably," Van Baaren notes.
The critical shipments industry has evolved significantly during the past several years. Consider the example set by UPS. "When UPS introduced its Express Critical division 13 years ago, it was built mostly around the automotive industry, but the services and products have since been diversified," says Wayne Hall, manager of Atlanta-based UPS Express Critical. "The service now handles a wide range of products, from financial documents to perishables, electronics, technology, even artwork."
HUMAN ORGANS: THE HEART OF THE MATTER
For Brown, selecting the transport mode that can get a human organ to its recipient in the shortest time without wasting money is a top priority. The transplant field "prefers to fly the organs," he observes. "Air is the most efficient and cost-effective way to move human organ shipments."
While less expensive than air, ground transport costs can add up quickly. "Unless they are traveling a very short distance, moving organs via ground transport tends to be expensive," Brown notes. "A seven-hour trip by car from Richmond, Va., to New York, for example, will likely cost $1,000 or more."
Tack on labor, vehicle, fuel, and toll costs and high-speed air transport becomes an attractive alternative.
To transport organs to and from airports, as well as for complete short-haul trips, UNOS relies on a network of ground couriers. Each organ procurement organization, and its corresponding transplant centers, can select one of two nationwide couriers: Herndon, Va.-based Sterling Courier Systems or AirNet Systems, headquartered in Columbus, Ohio.
Both courier services maintain a 24/7 call center, enabling them to spring into action at a moment's notice. "Drivers can pick up an organ from nearly anywhere in the country within 30 minutes to an hour from the request," Brown says. "The service completes all the documentation required to load an organ shipment on the plane, monitors it while in flight, and makes sure there are no delays."
The courier services also arrange for ground transportation to meet the organ and its carrier at the flight's destination and swiftly deliver the shipment to the waiting hospital.
As with just about all logistics services, particularly critical shipments, organ delivery has become a more complicated process over the past several years. "Before Sept. 11, couriers could run an organ shipment directly to the gate and load it on a plane at the last minute," Brown says. "Most airlines would put the organs in the cabin, or sometimes even in the cockpit."
Given heightened security concerns, however, this time-saving and convenient approach is no longer possible. Because couriers currently can't access the gate without a ticket, all organ shipments must now pass through airline cargo offices and are treated much like ordinary baggage, with some special handling conditions. "The packages are hand-carried, so they bypass the baggage chutes," Brown says.
Even in a field as critical as human organ shipments, mistakes and delays sometimes occur. "Shipments do get temporarily misplaced or misrouted and need to be guided back to the correct destination," Brown notes.
Human or system error, mechanical delays, or a flight crew that exceeds their allowable flying time can all cause problems. And don't forget the weather. "Blizzards, thunderstorms, and other weather conditions can alter schedules, so we're never able to get a true delivery guarantee," he adds.
While mistakes or delays can have devastating consequences—in extreme cases causing the loss of a transplantable organ—they are also rare. "Airline deliveries are extremely dependable, or we would have switched to chartered aircraft long ago," Brown says.
Scheduled flights are also much less expensive than charters. "Critical shipments require a balance between cost and speed," Brown says. "If you can't afford to pay for the service, it doesn't matter how fast or reliable it is."
AUTOMOTIVE PARTS: THE ROAD TO CRITICAL SHIPMENTS
Although automotive parts don't carry the same life-and-death importance as human organs, critical shipments nonetheless play a crucial role in the long-term health and survival of manufacturers such as Troy, Mich.-based Delphi Packard, a Delphi Automotive subsidiary specializing in manufacturing components including connectors, clamps, and terminal seals. These seemingly mundane devices can suddenly transform into vital commodities when they are needed to build or repair a vehicle.
At Delphi Packard, critical shipments flow in two directions: The company receives inbound components and materials in order to create products, and ships outbound to meet customers' needs for critical assembly materials and parts.
"Inbound shipments move to our plants to create new parts," explains Yvonne Castaneda, traffic coordinator for Delphi Packard. "Outbound shipments move to a wide range of customers, including General Motors, Toyota, and Mitsubishi."
Delphi Packard uses UPS Express Critical service for its "must get there tomorrow or sooner" deliveries. These critical shipments aren't only important, they are vital to ordinary business operations. "If an automotive production line in Detroit isn't moving because it needs parts, the downtime could cost $10,000 a minute," Hall observes.
UPS offers several levels of expedited and critical shipping services. Enhanced Secure Transit is utilized only by companies that need to move extremely valuable assets rapidly and securely. "Jewels, currency, some pharmaceuticals, and bank data tapes are some products that require this level of service," Hall says.
The service gives customers the option of having their shipment picked up by an armored car. The shipment is then loaded onto a UPS jet that flies to the company's Louisville, Ky., hub, where it is retrieved by an armed guard and brought to a secure area at the Louisville airport. It waits there until the plane headed to its destination is ready to depart. The shipment is then loaded onto the plane—once again with the assistance of an armed guard. When the shipment reaches its destination, another guard picks it up and delivers it to an armored vehicle, which then drives the shipment to its final destination.
Perishables: Special Treatment
Highly valuable assets aren't the only critical shipments requiring special treatment. Perishable cargo such as live animals, pharmaceuticals, and flowers also demands the service of carriers with special abilities and expertise.
Moving perishables grows even more complex when shipments cross international borders. That's when shippers need to call on carriers that can cut through paperwork and provide fast and safe deliveries to and from often remote locations.
Centurion Air Cargo, Miami, Fla., is one of many niche critical shipment carriers to address this market need. Specializing in the transportation of perishables and live animals, Centurion offers services to most destinations in Latin America, operating a fleet of eight DC10-30F full freighters.
Flowers and seafood are also mainstays of Centurion's business. "Northbound, we handle flowers and fish from many countries," Trutt says. "Going southbound, we move a large volume of perishables, particularly vaccines and other medical products." Centurion also transports a variety of routine, yet critically needed, spare parts to factories in Mexico and Central and South America.
The type of cargo Centurion carries is seasonally dependent. For example, the company often moves produce that can't tolerate days or weeks locked up inside a trailer or container. "Peru will soon begin its asparagus season, and planeloads will be coming into the United States," Trutt notes. "The produce has to leave the plane as fresh as when it was loaded onboard."
Centurion maintains a busy schedule to meet the needs of businesses throughout the Americas. Last September, for example, the carrier operated 39 scheduled weekly flights from Miami. Yet, in the critical shipping services field, schedules are usually little more than a starting point. "We often add extra flights to the schedule," Trutt says. "We have to be ready and willing to accommodate our critical shipment customers' needs, and can't plan for everything ahead of time."
3PL GOES CRITICAL
Echo Global Logistics' customers don't particularly care how the third-party logistics provider gets their critical shipments from one place to another; all they want are accurate and on-time deliveries. This isn't an easy mission to fulfill, according to Douglas R. Waggoner, CEO of the Chicago-based company. "It requires a company that's willing to take the time to analyze all the available transportation choices and make the most appropriate selection in terms of time, cost, and any special considerations," he says.
Echo is a non-asset-based transportation management company that handles shipments in all modes. "We do business both contractually with our enterprise clients, and on a transactional basis," Waggoner says. "We maintain a database of 16,000 carriers; we track and certify them, view their insurance certificates, and monitor their performance."
Echo arranges critical shipments for customers whenever the need arises. "We regularly meet with all our carriers and determine their capabilities," Waggoner says. "We also use our buying power to negotiate favorable rates."
To find the best critical shipment prices and delivery terms for its customers, Echo uses its technology to automate transportation providers' rate structures for critical services. "It is easier for us to execute shipments if we have access to carriers' rating engines, so we don't have to call them every time we want to move a critical shipment," Waggoner says.
Echo also keeps a close eye on carrier service. "We track the service and performance of every transaction we manage," he notes. "We have robust service reporting capabilities that our customers can use, but we also use them to manage the service performance of our carriers."
The 3PL pays special attention to the various details that can make or break a critical services shipment. "We track carriers in terms of on-time pickup and delivery, damage, and overall exceptions," Waggoner says. "Then we use a variety of dashboards and scorecards to select a carrier. Whether it's for a critical shipment, or a particular mode, we can compare the price that we're paying combined with the carriers' reliability and service." At the end of the process, Echo assigns a value to any particular carrier for any specific kind of transaction.
"But in most other cases, we can use an LTL carrier or an air freight forwarder to move critical shipments," Waggoner says. "It's all about coming up with the right solution."
Still, when it comes to critical shipments, pricing and other transportation fine points tend to go out the window, Waggoner admits. "Some companies look at transportation as a commodity until they absolutely need to have a shipment somewhere at a specific time," he says. "Then money is no object."
As global business expands, and more critical shipments begin traveling longer distances, new technologies will help both shippers and consignees better monitor shipment locations and projected delivery times.
"RFID and GPS positioning technologies will allow all parties in the supply chain to have more details and information on the location of a particular shipment," Van Baaren says.
The low cost of RFID, as compared to GPS, makes it the emerging technology most likely to enter the logistics mainstream in the near future. "Some companies in Europe are currently conducting trials of RFID use in the logistics market," Van Baaren says. "That could potentially have a big effect on same-day operations, especially for companies shipping, and attempting to track, more than just one urgent item."
While critical shipment carriers aren't afraid to take advantage of the latest transportation and technology advancements in order to give their customers faster and more efficient service, two old-fashioned technologies continue to dominate the industry: the clock and a map.
"You can be many things in the critical shipments field," says UNOS' Roger Brown, "but you can't be late or wrong."