“Missing even one component can cause a ripple effect on our entire production timeline,” Mello says, adding that a focus on expedited logistics and tight vendor relationships came into play. “We worked closely with our suppliers to find alternatives and even adjusted our inventory strategy to keep things running smoothly, mitigating the impact as much as possible,” he adds. BOOST COMPETITIVE POSITIONING Able Hardware, a key player in the metal fabrication industry, annually exports around 200 twenty-foot equivalent (TEU) containers from its operations in China and Australia to locations across the globe. “We’ve embraced expedited transportation as a strategic tool, not just in times of emergency, but also as a way to enhance our competitive edge and support our growth,” says Jason Woo, the company’s founder. During a peak season about two years ago, Able encountered a 20% jump in customer orders—well beyond its forecasts. To ensure the company met its commitment to customer satisfaction, Able turned to expedited shipping. It delivered orders on time, despite the spike in demand. “Our clients valued our reliability and trustworthiness, especially during peak season when delays are common,” Woo says. Able’s dependability during this critical period strengthened its relationships with customers and ultimately boosted repeat business. When a global steel shortage in 2020 threatened Able’s manufacturing schedule and, consequently, its ability to fill client orders, Woo expedited imports of a specialty alloy from a European supplier with which it had built a strong relationship, preventing production disruptions. “Expedited transportation isn’t simply our contingency plan; it is an integral part of our business strategy,” he adds. Expedited shipping can make sense in several other scenarios. One is simply the ability to move goods more quickly.
STEPS TO OPTIMIZE EXPEDITING Follow these steps to get the most from expedited shipping.
Take stock of your network. Expediting isn’t the only way to cut transit time. Companies also want to identify their logistics providers and network nodes that are close to demand centers, and assess whether it’s possible to forward deploy inventory so it’s closer to customers. Pay attention to details. Some shipment details may sound insignificant, but have the potential to delay the expediting process. For example, the receiving dock may need to receive expedited packages in a certain configuration. Identifying these requirements ahead of time can help ensure the expedited shipments face minimal delays. Research expediting options. While air transport typically is quickest, cargo has to comply with various regulations. In addition to understanding these requirements, check how quickly a shipment can get onto a flight, and whether it might sit at the arrival airport before traveling to its final destination. Delays on either end extend the overall time that cargo is in transit. Know who’s handling your freight. Before handing freight to a driver, check that their commercial driver’s license matches the information provided by the broker or logistics provider. Many issues that arise with expedited shipments are due to human error. “The more protocols you can put in place to make sure you load with the right people and they have the proper equipment to service your freight, the better off you’ll be,” says Patrick Noonan of Map Transit.
Define the problem you’re solving. The goal should be to identify a delivery offering that fits your organization’s purpose, rather than providing expedited shipments because other companies are, says Marc Palazzolo, principal in the strategic operations practice with Kearney, a global management consultancy. That’s especially the case if it’s not clear customers actually are looking for expedited shipping. This requires determining what customers truly want and how different solutions will impact costs and margins. Consider the customer’s value and the product’s margin. Before expediting, calculate whether the margin on the shipment allows for spending more on transportation. Then, determine if the customer’s value to the firm is worth the additional cost. Leverage decision engines. To gain the benefits of expedited shipping, organizations need sophisticated decision engines that can optimize delivery speed and cost, while considering multiple factors, such as the location of the company’s inventory and the carriers operating in the time frame and locations needed. It also includes the volume of business the company does with each carrier, which helps the company determine if it can take advantage of discounts and better manage any surges in shipping Plan for expediting. The sooner a company can let its logistics partners know of its plans to expedite, the more likely they’ll be able to access capacity.
November 2024 • Inbound Logistics 33
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