“Committing to production capacity without fully committing to the finished product allows the materials to be held longer in a flexible state,” Hatt says. 5 WORK WITH YOUR CARRIERS Until recently, when the spot shipping market proved more favorable, some shippers tried to renegotiate their carrier contracts or simply ignored them and moved to the spot market. “That’s not happening now,” Levine says. Shippers are sticking with their carriers, preferring to strengthen these relationships and gain stability in their ability to access capacity. At the same time, importers should ensure their carrier and supplier agreements allow for flexibility, recommends Spencer Shute, senior consultant with Proxima, a procurement and supply chain consultancy. Service- level agreements (SLAs) should include actionable, corrective plans that can help eliminate or reduce risk. 6 CONTINUALLY ASSESS TRADE LANES AND PORTS Given ongoing shifts in port delays, it makes sense to regularly review trade lanes and ports. While the shortest ocean route from Asia to North America is to the West Coast, congestion at these ports had meant some shipments languished for weeks. Timely information needs to guide decisions to change ports. When numerous importers shifted to East Coast ports to avoid congestion, wait times jumped at the ports in Savannah, Georgia, Charleston, South Carolina, and New York/New Jersey. Trends in port delays are more dynamic than in the past. It’s also worth monitoring the labor situation on the West Coast. The contract between the Pacific Maritime Association and the International Longshore and Warehouse Union expired in July 2022. However, as of early fall, business was proceeding pretty much as normal. Another concern is California’s Assembly Bill 5 (AB5), which limits the
To avoid potential problems in clearing shipments, U.S. Customs and Border Protection (CBP) recommends that importers get familiar with CBP policies and procedures. Here, a customs officer inspects a huge shipment of peppers imported from Mexico through El Paso, Texas.
ability of owner-operator truckers, as well as those in other industries, to operate as independent contractors. While the law faces legal challenges, it has generated confusion. “With AB5 now set to go into effect, thousands of owner-operators driving in California face an uncertain future,” said Todd Spencer, president of the Owner-Operator Independent Drivers Association, in a recent interview. “Truckers will be at the mercy of the courts to interpret how the law will be applied.” 7 ACTIVELY MANAGE DATA AND PROCESSES The complexity of importing today requires an active, hands-on approach. For instance, if the vessel arrives, but the fees associated with a shipment haven’t been paid on time, the goods won’t make it into the terminal. “It all has to be micromanaged,” Parker says. The same holds true when returning containers. Steamship lines often charge a per-diem if a container isn’t returned on time. However, one might charge $300 and another, $100. Without monitoring the data, an importer might not know about the differences. “Clean, actionable data is big,” Parker says.
Technology and analytics are key, allowing importers to “dig into the granularity of their data,” says Ben Bidwell, director of North American customs and compliance with logistics company C.H. Robinson. These tools enable importers to determine total landed cost, points of origin, and where duties are highest, among other information. Particularly when dealing with large numbers of stock-keeping units (SKUs), supply chain leaders need to shift manual work to artificial intelligence-based systems that can forecast most orders. “Modern systems today are able to combine scheduling orders based on constantly updated forecasts,” says Inna Kuznetsova, CEO of ToolsGroup, a supply chain optimization firm. 8 LOOK FOR INNOVATION AND INCREMENTAL WINS Supply chain and logistics professionals can find themselves spending inordinate amounts of time simply getting through the day—perhaps searching for a single container or SKU. It’s inefficient and leaves no time to innovate and improve. With today’s challenging environment, supply chain managers need to identify ways to improve
36 Inbound Logistics • October 2022
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