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  April 2014
 

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Yusen Logistics

The Calm After the Storm?
Anthony Paik, Jr., Yusen Logistics (Americas) Inc.


How has your supply chain been affected by the weather this year? Every year carriers and forwarders face challenges when dealing with the weather; however, 2013-14 has been more than most people could have imagined.

Customers are looking at different ways to try and resolve some of the issues above by routing freight differently and changing the way they are currently doing business. How is this being done? The southern ports in the U.S., in particular Savannah, GA and Charleston, SC, are receiving more bookings in lieu of railing or trucking to DC's or stores directly. This is one way to handle the volumes currently coming into the NY/NJ marketplace.

What are the costs associated with changing the supply chain? That depends, what does it cost when you can't meet the demands of your vendors and get the product on the shelves? The answers will vary. In an article in the Wall Street Journal importers talk about getting freight by ocean to the West Coast and southern ports of the East Coast and getting the freight across the country before a container in NY/NJ can be unloaded.1 That speaks volumes for the congestion at the NY/NJ terminals. Truckers are waiting in line 12-15 hours to pull one container, when they can normally turn three or four during that same time. They are spending so much time in line that they have posed a port congestion fee of $100 for picking up the container. Who is to pay this? The customer says it's not their fault the freight can't be picked up. The NVOCC's say we aren't going to pay it if we can't pass it on to the customer. Who wins? Nobody.

 

As we pull out of this severe weather and head towards better times, we have to think of how we can adapt to these obstacles. We are no longer just talking about getting the best rate and fastest transit time. We have to look at the real big picture and identify the reality of the true transit time end-to-end and what the real costs of doing business are. So the next time your forwarder or carrier comes in to talk with you about your new contract for 2014-15, look at the big picture - remember now that the winter is moving behind us, we are still reeling with port congestion here on the East Coast and don't forget to ask about the ILWU labor situation on the West Coast.

It is everyone's job to communicate and stay in tune with the market, identifying conditions affecting the supply chain and watching costs that affect the bottom line. There are things that are out of our control but how we handle those things becomes important. In the end, we all want the same thing - happy customers.


[1] http://online.wsj.com/news/articles/SB10001424052702303725404579461781431819414 


Anthony Paik, Jr. is the National Sales Director of Yusen Logistics (Americas) Inc. International Division, an NYK Group Company. Commercially responsible for the Ocean Freight Forwarding Sales for the Americas based in Secaucus, NJ, Anthony has been in the freight forwarding industry for 10 years and 10+ years with previously held positions on a national level.

 
 
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