In a 2017 American Shipper Report on global sourcing, 58% of shippers indicated that their biggest concern today is rising transportation costs. Shipping rates are climbing much faster than in the past, mostly due to heightened consumer expectations of fast home deliveries. An expanding network of inventory distribution points adds further strain on supply chain professionals.
Only 1 in 4 shippers connects sourcing and logistics on a single platform. If your organization falls into the majority (and the odds are you do) you likely miss out on opportunities to optimize global performance through the utilization of free trade agreements.
Recent American Shipper research reveals that the odds aren't in favor of your global sourcing and logistics relationship, as illustrated by Amber Road's infographic: Bridging the Sourcing-Global Trade Divide.
Chances are, you’re not the only one looking to reduce demurrage and detention fees. Recently, a coalition of shippers, freight forwarders, and intermediaries urged US maritime regulators to make it easier to challenge congestion-related fees that container lines and marine terminals impose for delays that were out of their control. Terminals responded that it would cause chaos at the ports. Just this past Monday, the Federal Maritime Commission (FMC) voted unanimously to investigate further the concern of the coaltion, a welcome validation for shippers in the wake of ever-increasing volume, labor disputes and port congestion.
The FMC will discuss whether policy is needed to prevent what the coalition of shippers deemed “unfair” assessment of free time-related fees. While detention and demurrage fees have rarely been light for importers, recent instances of extreme port congestion – such as the aftermath of liner carrier Hanjin Shipping’s sudden bankruptcy, or the West Coast longshoreman’s strike in 2014 and 2015 – have exacerbated the issue. And container volume continues to rise faster than port terminals can expand.
Of course, importers and exporters will continue to rack-up large fees while the FMC slowly deliberates. But demurrage and detention fees are more than just a “cost of doing business”; they often trigger a ripple effect that throws exception into the planned supply chain flow. These exceptions lead to additional costs that add up. While many freight managers accept them as a line item, they have a detrimental impact of the bottom line.
Traditionally, sourcing and logistics/trade compliance operations have been disparate and distinct. But believe it or not, times have changed. Today, there’s a straight line linking sourcing to global trade, yet many companies continue to treat these operations in traditional ways.
Although commonly overlooked, leveraging the connection between sourcing and trade is critical for optimal performance in today’s global climate. In order to manage supply chains in the current environment, a harmonization of data and functions needs to happen.
Amber Road is proud to sponsor American Shipper’s research report, Bridging the Sourcing-Global Trade Divide. Whether you leverage a single digital platform or not, the findings are sure to shock you.
Hurricane season is upon the Western Hemisphere, and 2017 looks to be a record-breaking year. Before Hurricane Irma barreled through Florida, where businesses, government agencies and residents were braced for the deluge, it leveled small islands in the Caribbean with high winds, leaving chaos in its wake. A few states over, the floodwaters of Hurricane Harvey may be receding but the price tag is rising to a multi-billion-dollar record. Unfortunately, ongoing disasters are not just attributable to hurricanes. In the western U.S. and Canada, wild fires continue to encroach upon civilization, spelling destruction for homes and businesses in their path. Mexico’s strongest earthquake in a century left dozens dead and buildings destroyed.
The west isn’t alone in facing life-threatening weather conditions. Heavy monsoon rains paralyzed Mumbai, India's financial hub, flooding streets and disrupting land, air and road traffic. In the Pacific, Macau is suffering an economic loss of US$1.42 billion in the wake of Typhoon Hato, and the Hong Kong Observatory expects three more typhoons to sweep in over the coming weeks.
"Free time" is often viewed as a luxury that we as human beings look as a time of relaxation, however in the world of global trade it costs about $35 million dollars in demurrage and detention, which are completely avoidable and preventable fees. These fees result in delayed deliveries and payments, lost sales, and lack of product availability for organizations facing congested ports and poor data analytics to help avoid these fines.
Logistics and supply chain managers are partly responsible for the unfairly low profile that their operations have in the overall corporate structure.
We need to talk about supply chain management - and, more specifically, the role of logistics within the supply chain - in a way that honors the far-reaching effect of those activities throughout a company's operations. On the one hand, there is still a lack of awareness in the boardroom; not surprising when you consider how rare it is, even now, to find a C-level logistics or supply chain exec there. But global logistics and supply chain managers, also, are partly responsible for the unfairly low profile their operations maintain within the corporate structure. In short, they fail to recognize their roles in the broader context.
The world, our nation and especially the apparel industry was stymied by the results of the Presidential election, and now are starting to realize the changes that might come with the Trump Administration. But the opening speakers at the US Fashion Industry Association’s Annual Conference in New York City on November 9th, didn’t dwell on the negative. As a trade association, and body of people and organizations that represent the industry there was a lot of optimistic discussion and positive outlook.
With Election Day less than 2 weeks away, supply chain executives are beginning to analyze what the future will hold for trade policies, agreements and regulations. The largest piece of trade legislation, the Trans-Pacific Partnership (TPP), is still in play, but importers and exporters are wondering not solely if, but how the result of the election will affect their supply chain operations.