One of the most sudden recent examples of supply chain disruption came in March 2024, when a cargo ship leaving the Port of Baltimore struck the Francis Scott Key Bridge. The bridge collapsed, killing six workers on the structure and halting ship traf c. Nexterus, a 3PL based in New Freedom, Pa., had several customers with cargo en route to Baltimore when the port closed. One was U.S. Boiler, which assembles heating systems in Lancaster, Pa., from imported materials and components. Nexterus had just a few days to decide whether to tell the steamship line to divert the company’s containers to Norfolk, New York, or New Jersey. “We had to look at the individual transportation costs involved in moving freight from those ports to Lancaster,” says Chris Schramm, director of sales and accounts at Nexterus. The calculations included not just the drayage costs, but also the charges Nexterus might incur if it took too long
Having one 3PL partner manage logistics from end to end helps home textiles company Town & Country Living stay agile and ecient, even when dealing with market uncertainties.
to return the containers to port. Ultimately, Nexterus sent the
A broader source of disruption is market volatility. Yesa Yu, strategic clients director at SEKO Logistics in Schaumburg, Ill., points to the way ocean rates soared to $20,000 per container in 2021 and then fell as low as $1,500 in the recent past. “And now there’s an uptick again,” she says. SEKO helps its customers through those ups and downs by taking a dynamic approach, staying closely in touch with the market and not locking shippers into carrier contracts that promise low rates but don’t guarantee space. “What good is a $1,500 rate if there is no capacity?” Yu asks. One SEKO customer, Town & Country Living (T&C), which supplies linens, window treatments, and other home textiles to major retailers around the world, has faced special challenges since Yemen’s Houthi militia started to attack ships on the Red Sea. Those attacks disrupt shipping through the Suez Canal—an important route in T&C’s network. Fewer sailings in that region mean tighter capacity and higher rates.
New York-based T&C manufactures its products mainly in India, Pakistan, Vietnam, China, and Turkey, says Ali Yehia, senior vice president, supply chain and logistics. Product for the U.S. market comes into a central distribution center (DC) in Georgia, about 70% of it through East Coast ports and 30% through the West Coast. SEKO manages Town & Country’s ocean transportation, drayage to the DC, and transportation to retailers. Having one partner handle logistics from end to end keeps Town & Country agile and ef cient enough to deal with uncertainties in the transportation market. “The SEKO team talks to each other,” Yehia says. “The drayage team coordinates with the distribution center team to understand when we need to ship. We save on lead time—the most important thing—and cost, because we use fewer administrative team employees to manage this communication.” This coordination also helps prevent performance issues that could trigger chargebacks from retailers, he adds.
containers to New Jersey, making new arrangements to dray them from there to U.S. Boiler’s facility. “We already had relationships out of the other port, so we were able to have trucking companies grab the freight and bring it to Lancaster, without a signi cant impact on existing costs,” Schramm says. CONSTANT EVALUATION Nexterus doesn’t make such calculations only when emergencies occur. “We’re always evaluating which port offers the best solution for our clients from a cost perspective,” says Schramm. For instance, drayage costs can uctuate a great deal based on carriers’ needs. “A lane going to Lancaster out of Savannah, Ga., might be enticing at a certain time of year, because the carrier is trying to do backhauls,” Schramm explains. During that time, it might be more effective to route freight through the Port of Savannah rather than Baltimore.
120 Inbound Logistics • July 2024
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