Optimizing Ocean Transport
The growth in e-commerce orders and strong economy mean companies are extending their supply chains to reach a global audience. Ocean transportation is a complex mode with unique considerations. To streamline your ocean freight process:
1. start consolidating
Minimize less-than-containerload shipments by consolidating multiple products coming from the same area into a single container. Shipping a single container is less expensive than multiple. If you can't consolidate into a single container, then send a few larger shipments to reduce costs.
2. compare costs of different transport modes
Find the best way to ship your products for the lowest cost while still meeting customer service levels. You may find you can send some of your expedited air freight or over-the-road shipments by ocean instead.
3. ensure proper information on your shipment
Any discrepancy in address, purchase order number, quantities, weights, sizes, and SKU-level information can hold up your shipment in Customs.
4. provide the right documentation
Proper documentation on import/export items is needed to meet regulation requirements if you want to avoid any fines, which can be substantial. Customs is increasing enforcement of regulations and if there are any inconsistencies, your shipment can be held up or your business penalized.
5. perform freight bill audits on every shipment
Many freight bills contain errors. If you don't audit, you leave dollars on the table. Sometimes the carrier misses shipping surcharges and comes back later for payment. These could prove costly since customers may not agree to pay additional charges after the business has concluded.
6. prepare in advance
Provide volume and seasonality information in advance to avoid unnecessary additional costs at the last minute. The right amount of allocation is particularly important for shippers with high seasonality and big volumes. A 10,000 TEU ship has a fixed capacity and will not be able to accommodate even one more TEU.
7. Implement triangulation to avoid shipping empty containers
With triangulation, the same container and carrier is used for import and export—from point A to B, then immediately on from point B (or somewhere nearby) to its next destination. This also saves having to pay detention charges on a container not immediately returned to the yard.
8. review carriers
With the volatility of the ocean carrier market, it makes sense to re-evaluate your carrier database to extend your closed carrier pool with additional suitably qualified providers. If you are currently tendering with a smaller than ideal carrier pool, you may not be getting the best rates.
9. use an automated bid management solution
The ocean freight industry is in turmoil with a record number of mergers, acquisitions, and new alliances that impact service in key lanes and reduce carrier capacity. An automated solution will save time and provide the best rates.
10. Update forecasting values
Use data gathered with digital methods to update forecasting values. This allows you to receive more granular data from other departments, creating new levels of insight, such as a realistic demand growth rate. Being able to forecast more accurately means you can identify peaks and troughs, making it easier to negotiate with carriers.