December 2007 | Commentary | 3PL Line

Managing the Mess on the High Seas

Tags: 3PL

Logistics managers have given much thought to streamlining land and air transportation. But water transport still lags behind - and the fallout can have significant impact on even the best laid logistics plans. This is especially critical in a world where overseas sourcing has become the norm rather than the exception for North American companies.

As companies increasingly look farther afield for suppliers, their reliance on efficient water transportation has grown exponentially. To meet increasing volumes, ships have expanded their capacity from the early days of less than 2,000 TEUs (20-foot equivalent units) to the current 10,000 TEUs.

While these new vessels are able to handle massive shipment volumes, the infrastructure cannot. Port expansion has been slow to catch up. Traffic congestion is rampant, especially for Asian imports that have been posting double-digit increases in quantity every year.

Shipment loading, receiving, and distribution are not only becoming increasingly complex, but any delays can lead to significantly greater financial risks. A labor shortage or docking delay can quickly undermine the benefits of off-shore sourcing.

The escalating problem is not insoluble. But it does require a "bigger toolbox," one that includes much longer planning cycle times, well-architected contingency planning, improved shipment visibility, and the ability to source from alternate delivery channels using "in transit," off-dock distribution container freight stations to expedite deliveries on-shore in the event of a delay.

The more focus on the visibility and planning process, the lower the risk.

Achieving results such as on-time delivery and low risk begins with an experienced ocean carrier - one that can help overcome these hurdles.

Shippers should look for carriers that provide intermodal ocean transport from door to door in a time-definite environment. Establishing long-term, contracted relationships with reliable carriers, bundled with customized pre- and on-carriage arrangements that include both full and less-than-full containerload services, is the best way shippers can achieve high service quality and efficiency.

Carriers should also be able to handle customized solutions for logistically complex shipments, break-bulk, and other activities that need extra care.

No matter what kind of freight they move, shippers need to gain insight into the way carriers work and how they address unique business and transportation needs. The key is to probe a little deeper into the services carriers provide.

Shippers should find out if prospective carriers maintain their own offices in every significant harbor and industrial region of the world, enabling them to react promptly to unique requirements.

Will that supplier facilitate the most suitable transportation arrangements and select appropriate carriers for every shipment? Can they recommend not only the most appropriate, but also the most cost-effective solution to suit the shipper's specific needs? How are they prepared to handle delays and offer alternative solutions?

North America's reliance on inexpensive raw materials and outsourced manufacturing from Asian countries will only increase in the future. That reliance will likely exacerbate ocean traffic and further clog already busy ports on both sides of the ocean and the continent.

By asking the right questions and probing for the right answers, shippers are better prepared to select an ocean logistics service provider that will successfully steer their shipments through the mess on the high seas.