World Trade - February 2009 - (Page 42)

LOGISTICS Pilot Freight Services Misunderstandings are common tell the customer that it’s available. Third-party logistics regarding letters of credit, Feldman Products typically are packaged the says. They are issued by banks, same way for transit to Afghanistan providers are well with differing terms and formats, as they are to Oklahoma City, notes so it pays to investigate them careRon Cruse, president and CEO of positioned to help fully. A letter of credit basically Logenix International. The reasons holds funds in escrow until the shippers make the most range from unfamiliarity with new terms of the contract have been products and simple inertia—this met. Such letters are common in of on-the-ﬂy transactions is the way it’s always been done— international business, but include to cost—the old method may be because they already a bank charge. Unfortunately, more expensive or labor intensive “many Americans don’t underhave networks in place. and so makes more money for the stand what’s involved,” and are packaging ﬁrm than a newer, more surprised by bank charges someprotective method. From a shiptimes in excess of $200, he says. That can be particularly per’s perspective, it pays to ask about recommended packunpleasant when it accrues because of a small order from aging options and to do some research on your own, too. an occasional customer. Packaging is particularly important for ocean freight, Feldman says. “Make sure it’s secure and watertight,” Packaging he advises. Note, however, that “watertight” packaging An on-the-ﬂy order may require packaging that differs from does not necessarily protect against corrosion, because a customer’s given norms. “The contours of a passenger the corrosive gases are airborne. For that protection, seek airliner are different than those of a truck,” Slater points out, out anti-corrosive packaging. Several options are availand the cargo hold may not be able to handle the usual-size able, and some of the newer methods are more protecpallets. Likewise, doors of smaller jets may not accommo- tive, faster to apply and to remove and less expensive date shipments’ usual widths and may require pallets to be than the standard methods. An on-the-ﬂy shipment may broken down, which increases handling and the chance offer a good ﬁeld test of the new capabilities. of damage. Packaging designed for a tightly packed truck During the past year, some shippers have reported probably will be insufﬁcient to protect a less than truck- container shortages. Pilot is building its own containers load delivery or goods in a cargo plane. The reason, he to offer to customers and also works with third parties explains, is that cargo density changes according to mode, to help ensure that containers are available for its cusand decreased density allows shifting during transit, which tomers. One year ago, ocean freight line APL introduced increases the potential for damage. deep-sea 53-foot containers designed for the rigors of One of the secrets of the shipping industry is that packag- the transpaciﬁc route to help its customers leverage big ers don’t necessarily offer the best packaging. They provide box economics. The beneﬁts include lower container what the customer requests, and if the customer doesn’t ask expenses and less container handling, which improves for something particular, even reputable packagers may not efﬁciency and, therefore, time to market. 42 WORLD TRADE FEBRUARY 2009

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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