14 Jul Competitive Advantage Amidst Market Uncertainty
If you are a retailer importing and exporting finished products, supplies, or raw materials or working for a fast-growth ecommerce or retail brand, then you are definitely facing market conditions with no end in sight. Navigating the current uncertainty in ocean and air freight and how air and ocean shipping cycles will impact your business in 2022 is just a starting point on your own journey toward stabilizing your supply chain to deliver better outcomes you and your customers are looking for. The following are the challenges facing supply chain and suggestions on how to turn these challenges into a competitive advantage:
- Understanding the Challenge
With market and ocean and air freight uncertainty, importers and retail brands can feel like they’re in between a rock and a hard place likewise:
· The rock is the rising freight costs and volatile transit times forcing brands to choose between paying more for services like air freight or premium ocean services, leading to potential margin loss on your products for:
o Rising freight costs and volatile transit times created a problem for importers – lost margin or lost sales.
o Ocean / Air freight costs at an all-time high
· While the hard place of course is defaulting to standard services that have become less reliable and elevating your risk of stockouts even as demand is at an all-time high for:
o Long transit times put priority SKUs at risk of stock-out
o Air freight or Premium FCL reduced transit time, but cut deeply into margins
o Importers asking for creative solutions that eliminate the trade-off
· Since neither one of these situations is ideal, we’re sharing some timely advice on taking back control of your supply chain, and how best to avoid both losses in margins and lost sales.
II. Rising to the Challenge
So how can brands win in the face of so much disruption and uncertainty? To that end, we’re highlighting ways that ecommerce and retail businesses can start asking the right questions–and use the answers to use the current freight market disruptions to your advantage. However, starting by focusing on the small wins you can actually control, for small wins offer a better way forward. Small wins add up and can have a huge impact on your business. Here are some things we recommend:
- Advanced Planning Can Equal Faster Shipping Times
So, if you are not booking early, it is one of the easiest things for you to do as an importer to change this dynamic in your favor likewise:
· First, make sure that you’re working with your suppliers and your freight forwarder to align on a plan that’s looking ahead.
· You should be booking at least four weeks ahead of your cargo ready date for ocean shipments and at least two weeks ahead of your cargo ready date for air shipments.
· Any partner that’s procuring this space for you is dealing with a supply-constrained market and the more visibility and lead time you can give your partners to plan for that cargo to be moved, the faster they’re going to be able to get it on a ship or plane and on its way to your warehouses and stores.
· This is a clear example of where planning can manifest in faster transit times and specifically, it helps you minimize the time between the cargo ready date and the actual time of departure.
- Diversification Of Risk Levels the Playing Field
Pre-planning, diversification of risk, booking early, and spreading out your volume across multiple bookings, are all highly recommended strategies to ensure you’re getting your inventory when you need it for:
· In the second half of 2021 only 85% of sailing schedules actually held–the rest were canceled or blanked.
· Let’s consider an example: Say you had one booking and you put five containers into that booking.
· That means there’s a 15% chance that whatever vessel that was booked on won’t actually leave.
· Now you’re looking for a new sailing date, potentially weeks later, to load that cargo.
· Alternatively, if you had split those five containers over three, four, maybe even five bookings you could have diversified your risk.
· Placing them across multiple vessels increases the chances that four out of the five would have departed.
· For retail businesses in particular, the difference between getting 80% of your inventory on time versus potentially not getting any of your inventory on time could make or break you.
- Destination Flexibility Can Yield Further Gains
The next small win to want to focus on is flexibility in your destination, especially in the United States for:
· It would be easier to deal with delays if congestion was always at the same node. But it’s not.
· Congestion moves around, sometimes it’s at the rail yard, most often it’s at the ports or terminals.
· This uncertainty means you need to be in constant conversations with your freight forwarding partner and warehouses.
· And you need to be adaptable and iterative on how you manage the destination side of your shipment.
· Whether you’re leveraging rail, trans loads, or other options, you really need to think about shipment-to-shipment and work with your freight forwarder
- to avoid nodes of congestion and steer your shipments towards better inter-modal options.
- Consolidate To Prioritize SKUs with 3PLs
The last small win that we’re going to focus on here is to focus on consolidating your shipments to prioritize the high-demand SKUs you need most for:
· Let’s consider the example of Flow Direct, a unique consolidation service that is offered in partnership with 3PLs like ShipBob.
· 3PL has a broad meaning that applies to any service contract that involves storing or shipping items.
· Flow Direct is created to allow ShipBob’s customers to bypass the regular, time-consuming, deconsolidation stage.
· With Flow Direct, Shipbob receives these shipments directly at their dock door, where they take over getting the goods to their customers via their last-mile network.
· We did this by creating a dedicated container for ShipBob’s merchants which we loaded on a faster boat that called on a less congested terminal in LA.
· ShipBob as one of our 3PL partners, prioritized the receipt of that container and their clients were able to hit their Black Friday sales in Q4 of 2021).
- Consolidate To Prioritize SKUs with LCLs
When we talk about consolidations, what we’re talking about is less than container load (LCL) ocean shipments and this can work really well for companies that can prioritize their SKUs for:
· LCL is used when a single shipper’s goods do not completely fill an entire container.
· When this happens, in order to fill an entire container, space in the container is split between orders and/or shippers.
· Maybe you have certain SKUs that are selling faster or are at higher risk of going out of stock.
· Or they’re just more important to your customers or for a particular season.
· If you can differentiate amongst those SKUs, you can start to get creative with how you book them out by leveraging consolidation services that can provide faster transit times and lower costs, etc.
- There is no silver bullet – find more small wins
To learn more about how you can help keep your shelves stocked and customers happy with end-to-end supply chain tracking, agility, and resilience find more small wins likewise:
· We hope these suggestions have given you a starting point on your own journey toward stabilizing your supply chain to deliver better outcomes you and your customers are looking for.
· It’s time to take back control of your supply chain and turn the current market uncertainties into a competitive advantage for your business.
· If you work for a fast-growth ecommerce or retail brand, creating demand is just the start.
· You’ll need to eliminate backorders, waitlists, and stockouts to deliver on that demand.
· Early bookings and fewer TEUS / CBMs per shipment
o Book 4 weeks before cargo ready date
· Stick to your Cargo Ready Date and Shipping Order
o Ensure accurate Cargo Ready Dates and stick to your Shipping Order
· Flexibility at Destination: Rail, Transloading, Long Dray
o Trucking to circumvent Rail congestion, Better predictability, faster transit times
· Premium Services
o Moving cargo and finding space in this market is the primary objective
o Explore less-than-container load options if you need particular SKUS to move fast
· Non-Operating Reefers
o Non-Operating Reefers can have prioritized equipment and space
· Alternative Routings
o Look to steer cargo away from congested ports and utilize destination trucking
There are many ways to optimize and improve international shipments from consolidation to arranging cross-docking, but if you plan to utilize all, we DIJLA would be happy to help you choose the right pallets, properly secure your shipment, and handle anything from custom packaging to customs clearance.
That is why DIJLA helps companies manage their shipping logistics so that shipping times can be optimized. We provide shipping solutions at every level of the shipping process so you can get the most out of your shipping budget without needing to deal with the hassle of complex shipping procedures.
What about allocating the whole process to one of the most well-known shipping companies globally that combines freight shipping, supply chain management, shipment tracking and other services, with a solid understanding of shipping methods and insurance, as well as a good grasp of overseas markets and regulations and equipped with specific qualifications involving the transportation of hazardous materials, oversized cargo or dangerous goods?
Indeed, it relieves you from doing thorough research from the start to see where your international shipping niche might be, paying lump sums when you can manage your budget and spend and the hectic of perceiving this hazardous chain.
DIJLA who is highly regarded for its shipment services to all Iraqi provinces and manages shipping documents for Iraq customs, is ready to provision the whole process for you from freight forwarding to shipping and logistics services, land transporting services, custom clearance services and door to door delivering services with the aforementioned specializations and qualifications and the handling of all these concerns to ensure your goods will reach safe and get imported to the destined customers efficiently.
From a modest beginning in 2011, DIJLA today boasts of working with reputed partnerships, an internationally accredited matrix of agencies that warrant us to extend effective services across the globe. From the list of shipping companies in Dubai, DIJLA Shipping & Freight Forwarding L.L.C is a leading Logistics and Shipping company since 2011. With offices in Dubai, United Arab Emirates, China, Iraq, we provide the art of international Door-to-Door shipping services, Air Freight, Sea Freight, Transportation services and logistics services. We manage and deliver globally different sizes of cargo, from small to standard to big sizes, with effectiveness and accuracy in order to meet the highest levels of Customer satisfaction. Our team comprises the wizards from the logistics industry who possess cognizance, acumen and foresight about this industry.