Specialized Transportation: Paying the Price

Tags: Specialized Logistics, Transportation, Logistics, Supply Chain

When moving high-value items, proper packaging and labeling, efficient scheduling, discretion, and a bit of extra effort are key to minimizing the risk of theft or damage.

In the 1980s, when Len Batcha was working at a medical laboratory company, he and several colleagues were charged with moving large, expensive medical equipment to various regions around the world as rapidly as possible to test for the AIDs virus. "There was so much demand," Batcha recalls, and a short window for moving the equipment.

To prepare the machines for air, ocean, and ground transport—most used all three modes during their travels—Batcha and his coworkers employed a range of packaging materials and techniques, such as triple wall corrugate and foam inserts to act as shock absorbers, and moisture control monitors. During delivery, the crew sometimes had to remove windows and use cranes to hoist machines into place.

"The goal was getting the instrument there 'alive,'" he notes.

After that job, Batcha joined Technical Transportation Inc. as one of its first employees; he is now president. He and his colleagues knew the techniques used to move expensive medical equipment could also apply to other markets, such as furniture, high-value art and décor, and electronics, as well as computer equipment, including large, sensitive servers.

Shipping any high-value item often requires extra thought and effort, a little more hand-holding and discretion, and an understanding that each situation is different.

To start, the market for high-value products often deviates from other markets. "In our experience, shipments of high-value items do not follow regular trends of other commercial shipments," says Reid Malinbaum, senior consulting director with ETC International, a provider of custom freight services.

ready to buy

While many consumers pull back when the economy tightens or currency fluctuations go against them, wealthy individuals often continue to make purchases. For instance, colored diamonds—stunning blues, greens, and other hues that can sell for well into six figures—constitute their own market. "Regardless of the economy, the super-rich will continue to buy," says Eyal Alon, sales manager with Malca-Amit USA, a logistics provider focused on luxury goods.

A growing number of individuals are investing in art to diversify their portfolios, says Patrik Berni, head of business development with Loomis International Corporate AG, a provider of transportation solutions. That also translates to more shipments.

Many people are more comfortable with the idea of ordering expensive gemstones and jewelry through the internet than was the case 10 years ago, says Dave Zamsky, vice president of marketing with UPS Capital, a division of UPS. In fact, research firm Technavio predicts the global luxury e-tailing market would expand at a compound annual growth rate of 14.3 percent between 2015 and 2019.

In the life sciences market, "we continue to see an upswing in high-value life science shipments," says Justin Murrietta, director of life sciences and global sales with Pegasus Logistics.

zowie! comic books pack a punch

Even the humble comic book can command extra care during transport. Metropolis Gallery deals in vintage comic books; owner Vincent Zurzolo also runs Comic Connect, an auction for vintage comic books. The prices for some comic books rival those of fine jewelry or art. A mint condition Pep Comics #22—the issue in which Archie and Jughead first appeared—recently sold for more than $250,000. "It's part of Americana, like Disney and Mickey Mouse," Zurzolo says.

Whether it's fine art, gemstones, collectibles, or expensive medical equipment, transporting high-value items demands extra care and attention. The planning starts before the products leave the factory or seller. A first step is assembling a "solid network of dependable people," Malinbaum says, "and determining "who does what, and where." Does a carrier's responsibility extend from airport to airport, or from a gallery to the new owner's door? Eliminating gaps is critical with high-value items.

For instance, before a drug launch, it's critical that a life science company and its logistics provider perform a validation study, Murietta says. This includes validating not just the routing information, such as airlines and transit time, but also confirming the temperature-controlled packaging solution will maintain proper product temperatures throughout transit.

A customized standard operating procedure that outlines transit requirements, escalation procedures, and contingency plans, among other information, will also help minimize risk, he adds.

Move Quickly

Faster is better when transporting most high-value goods, as it means less opportunity for a package to be damaged or lost. "Choose the most expeditious route and mode," Zamsky recommends.

When possible, it's typically best not to consolidate high-value packages. Consolidation often leads to extra handling. In addition, the package likely will ship in slower consolidated status, rather than priority.

Proper packaging, while always important, becomes critical with most high-value items. "The secret sauce" mixes limited-touch network options with the right packaging solution, says Hiram Hartnett, executive vice president of sales with Pegasus.

With jewelry and watches, not only does the packaging need to protect the contents, it should disguise them. Given their smaller size and dollar value, "they lend themselves to theft," Robinson says.

For instance, Alon places some jewelry inside tamperproof bags with metal seals, which then might be placed in multiple containers. Opening all the packages would require at least 20 minutes and a set of tools.

Some of Alon's packages contain unique identification numbers that also are sent to the final destinations, and timed to arrive before the jewelry. In the case of a discrepancy between the two numbers, the customer knows not to sign for the delivery.

With expensive medical equipment, packaging engineers are critical. Along with testing carton and crate damage, they can assess whether movements in transit will impact a machine's alignment.

The Need for Discretion

Once an item is safely packaged, the label becomes key. "Don't use words that draw attention to the fact that it's a jewelry shipment," Robinson recommends. The goal is anonymity, or making it simply one package among many. Indeed, UPS technology watches for and corrects when it notices words like "diamond" appearing on a label.

When sending packages to jewelry companies, Malca-Amit often abbreviates the name of the recipient, so Mainstreet Jewelers might become simply Mainstreet, to minimize any hint of what might be inside. The firm also refrains from indicating the declared value on the package.

While Alon alerts customers during each transportation phase—letting them know, for instance, that a package cleared customs—if someone calls asking which flight a shipment is on, he won't say. The reason? It's difficult to be completely sure callers are who they claim to be, or what they will do with the information.

Alon recommends recording both the packing and unpacking of high-value items. "You want the recipient to open the package under a camera, and verify that it wasn't tampered with," he explains. If it's clear the package was altered, the customer can refuse the delivery.

Imports and Exports

Moving high-value items across borders requires additional steps. Accurate, thorough documentation becomes even more critical. In particular, the harmonized tariff coding should be error free. Any mistakes can lead to an item being unboxed, which prompts delays and potentially increases the risk of theft or misplacement.

The carrier should assemble "an overlay" of quality, reliable international providers, along with domestic service providers, suggests Jerod Hudnall, executive vice president of global development for Pegasus. Of course, the providers should be able to accommodate all requirements, such as those for temperature controlled or oversized cargo.

With any shipment of high-value goods, the ability to adjust to varying circumstances is key. Zurzolo, for instance, purchases comics from countries scattered across the globe. Many sellers can safely pack and ship their comics to him, using directions his staff provides. With some particularly valuable collections, however, Zurzolo travels to the seller. He'll then employ armed guards to protect the books as they're transported back to his offices.

"Every situation and every shipment is different," he says.

Visit Our Sponsors