Logistics Contingency Planning
Can your company weather a logistics disaster such as a terrorist attack, airport closure, or worker strike? These sudden disruptions can strand you—along with your customers' freight. Here are tips on planning for a crisis, and handling emergency shipping when a major disruption happens, from Joel Childs, vice president of marketing, FedEx Custom Critical.
1. Designate a business continuity point person. Because any disruption to your business can be extremely costly, it's imperative to make someone within your organization responsible for your continuity planning. Give your point person the authority to carry out the job and make him or her responsible for all actions and outcomes, including emergency shipments.
2. Define all possible disruptions to your business. Business disruptions come in all shapes and sizes—from natural disasters, fires, and chemical spills, to system failures and call center outages, work stoppages and unforeseen airport closures. Think through the gamut of scenarios that could present a shipping emergency for your company.
3. Hope for the best but plan for the worst. Outline the steps you'd need to take to remedy each disruption scenario. This includes making sure that everyone involved—technology, operations, purchasing, transportation—knows their role, as well as who is responsible for what actions.
4. Know where to get help. Because it's almost a sure bet that you'll need to expedite shipments in an emergency, talk to carriers about their capabilities before a crisis arises. While all expedited carriers are in business to speed shipments, they offer different types of services and have different service records. As with any purchase, you need to select carefully. Do your shopping in advance so that you've already identified your mission-critical carriers and will know who to contact immediately during a crisis.
5. Understand all your transportation options. There are numerous cost- and time-related issues to consider in choosing how you want to expedite your emergency shipments, including exclusive use of vehicle, two-way tracking ability, 24/ 7/365 availability, special handling requirements, and domestic vs. international capabilities. Your final carrier choice will depend a great deal on the nature of the emergency and your recovery needs.
6. Test your plan. It helps if you test your recovery plan with your carriers up front to uncover any problems with the process. The cost of a test run will likely be minimal compared to the effect on your bottom line if your expedited transportation plans fail in a real emergency.
7. When an emergency strikes, put your plan into action. Keep a cool head and follow the actions you've already outlined. Make sure everyone involved in the recovery effort maintains constant communication with each other to help ensure that your efforts run as smoothly as possible.
8. Even the best-laid plans can go wrong. Unfortunately, Murphy's Law has a way of creeping into emergencies. Be prepared for last-minute glitches that may cause you to alter your plan. For instance, if you planned to use a ground expedited carrier to transport a new generator for your facility but a flood has washed out the main road, you'll need to go to Plan B. The best advice: be flexible with your contingency planning. You might need to explore more than one option to resolve the crisis.
9. Stay current on factors that can change your plan. Contingency planning is an ongoing process because many factors can change your requirements. For instance, since the Sept. 11 attacks, security measures for cargo tendered to commercial aircraft have not increased, but the scrutiny has. According to FAA regulations, only "known" shippers who have customer records with the broker and either an established shipping contract or an established business history can tender packages or freight to commercial airlines.
10. If you don't have a contingency plan, punt! Even if you don't have a formal business continuity plan, you can still help resolve your transportation emergencies by getting help from a quality expedited carrier that can handle multiple modes.