World Trade - February 2009 - (Page 41)

that’s accustomed to handling specialized shipments. Before you arrange for shipment, though, there are a few details that must be settled. First, Slater emphasizes, determine exactly what the customer is requesting. “If you’ve optimized your transit channel, it’s a safe assumption that an on-the-ﬂy shipment will have a premium cost.” To minimize that, he says, determine when the shipment must arrive and what modes of transportation can get it there in time. An overnight delivery has one set of options, but an emergency order that’s needed in one week has a different set of options. At the same time, he says, determine whether the customer really needs the entire order at that time or whether part of the order can be expedited and the remainder shipped via a less expensive mode. Third-party logistics providers are well positioned to help shippers make the most of on-the-ﬂy transactions because they already have networks in place to handle a wide variety of cargo nationally and internationally. As such, surprise shipments generally can be absorbed within a 3PL’s existing contracts. LeanLogistics is a case in point. Its Private Transportation Network is a spot market that matches need to capacity. The system uses a software as a service (SaaS) platform to link its shipping clients to thousands of carriers. As Chris Timmer, VP of sales and marketing, elaborates, “Shippers can go to the network and solicit bids on the spot or on a strategic basis.” Requests may be based on carriers, lanes, availability or any other permutation It’s all about options The distinction between carriers and 3PLs is blurring, too, as carriers add services that are transforming them into logistics companies capable of handling inventory control, quality assurance, merge-in-transit, store-sellship and other options. “There’s been a good amount of consolidation among logistics companies,” Bob Gahagen, director for operations at Menlo Worldwide Logistics. “Menlo and its Con-way subsidiaries, for example, are working across multiple organizations to deliver more rounded-out solutions,” he says. Menlo has made a heavy investment in technology to shorten lead times and to guarantee delivery times. It also embraces the lean principle established by Toyota decades ago for continuous process improvement. Crowley Logistics, Inc. is an example of the direction many firms are heading. Crowley specializes in textiles and has noticed that retailers are interested in getting materials faster. They prefer more, but smaller, shipments, according to Miguel Artiga, VP for Central America. Therefore, its capabilities are growing, as it increases its access to trucking in Central America and its warehouse space, and adds services. Some Crowley facilities even offer quality assurance inspections for customers’ products. That gives shippers on a tight deadline an alternative that may speed shipping. Prepositioning merchandise in warehouses nearer to the customer also can help speed on-the-ﬂy shipments. For example, internationally, contracting with a carrier or On-the-Fly Transactions and go to all carriers or to subsets of the network. The Private Transportation Network includes truckload, lessthan-truckload, intermodal and rail carriers currently, and will include ocean carriers within the next 12 months. This service resolves the issues that result from short lead times or capacity constraints by helping shippers access the capabilities of a very broad range of carriers. The beneﬁts of greater visibility to those carriers, Timmer says, include reduced costs, increased efﬁciency and timeliness. By accessing additional carriers, shippers can improve their own levels of service to their customers by leveraging the lanes, capacity and additional services of a broad carrier network. Broadening the competition also tends to reduce costs. Timmer notes that requests for quotations can take the form of broadcast tenders sent to all carriers or be narrowed to those ﬁtting certain parameters or even to a few preferred carriers. That process is more efﬁcient than phoning preferred companies for bid, he adds. “We coach our clients not to do an eBAY style reverse auction, in which the last bid to arrive is the lowest cost.” Instead, Timmer encourages shippers to set a price, and “when they meet your price, accept it.” He says that provides an incentive for carriers to give their best price early. 3PL to store and ship goods from an export distribution center in a free trade zone gets the goods closer to the customer, reducing the transit time that can be particularly problematic for international on-the-ﬂy shipments. To better serve good customers with erratic ordering habits, it may be worthwhile to work with a warehouse or distribution center in the client’s country, so goods can be shipped directly, already having cleared customs. Positioning goods nearer the customer is becoming increasingly popular within the U.S., too, Gilmore says. Following that trend can be particularly handy for servicing customers who frequently place orders. At some point, “It helps to sit down with professions in your area,” Feldman says, to discuss your speciﬁc needs and carriers options. “The big guys may not have the time to do that,” he opines. Terms Don’t assume that terms for on-the-ﬂy shipments are the same as for your regularly scheduled shipments. They typically have a premium price. Also, because they are hurried, documentation may be ﬂawed, slowing delivery. Feldman advises working with someone who will ensure that documentation is correct and that the terms are reasonable. WWW.WORLDTRADEMAG.COM 41 http://WWW.WORLDTRADEMAG.COM

Table of Contents Feed for the Digital Edition of World Trade - February 2009

World Trade - February 2009 Contents Taking Stock in America Confronting Corruption in Latin America Supply Chain Watch Tradewinds Where's the Goods? Where's the Money? Hope on the Horizon Managing Fleets in Turbulent Times The Impact of China's Economic Slowdown on U.S. Supply Chains The Fuel Volatile Supply Chain Getting the Most from On-the-Fly Transactions Managing Supply Chain Risk by Managing China Sourcing Capacity OECD Global Economic Outlook for 2009 'Natural' Agricultural Monopolies No More

World Trade - February 2009

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