Customers Profit From Consolidated International Logistics
By Arend du Preez, MD of Crossroads
Why high tech supply chains matter
Companies that ship bulk, internationally could be losing a fortune through no fault of their own and nothing puts fiscal waste under the microscope quite like economic pressures globally and at home.
I find South Africans to be highly adaptable and I can see companies reinventing themselves throughout the economy. In our industry there’s scope for customers to maximise their margins even more. Most people understand land-side logistics well. There’s not a lot of room for service providers like us to improve your knowledge even while we supply you the economies of scale you can’t necessarily achieve on your own. We routinely find that there is poorer understanding of the international leg. It’s not surprising.
There’s a lot to learn and one of the big problems is some less transparent operators abroad don’t make it any easier. The less scrupulous operators protect their interests by not fully disclosing the options companies have. There are many third-parties in international logistics and each fills its own niche. When those service providers give customers options they usually limit them to their own services. But what about the others that may be more beneficial to what the customers want even if they make less money for the service provider?
That’s why consolidated services make sense. Consolidated services from suppliers like Crossroads that have no vested interest in one particular fulfilment service over another mean customers get all the options and can choose the ones that make the most fiscal and business sense for their solution.
You no longer have to deal with as many as 20 companies if you want to ship something from a place like China, for example. There is road transport, clearing agents, shipping lines, and many more third-parties to consider. Each one takes commission, which is fair because it’s business, but you may not need them all. Or there may be more cost-effective options and there are issues, such as demurrage, of which many people don’t even know.
A single point of contact provides companies with a single, known entity and point of service guarantee. It eliminates the guesswork, the unknown entities, the hidden costs, the time-consuming delays, language barriers, and the many other hidden hazards. In fact, when you get down to it, the actual transport is a fraction of the cost.
The other important factor to consider is visibility into the international logistics process. Our customers must also be able to show their customers where goods are in the process. It’s part of the cost that affects stock holding. Effective communications are important because they trigger planning which, if you get it wrong, impacts costs throughout the supply chain.
More sophisticated views into the supply chain give you just in time capabilities and overall efficiency improvements that reduce costs. Customers often have intimate knowledge of their supply chain requirements based on their extensive business knowledge and industry knowledge. They also often have profoundly experienced people. We have to harness that knowledge and experience and use it on your behalf, combined with our own expertise, experience, and knowledge. Because that experience in designing the supply chain is invaluable and it helps to remove the less profitable side of the human factor. One of the top priorities of modern supply chains that want to get the most out of a turnkey source to destination solution is to eliminate people from the process because people are inefficient.
Combining all of these elements into a single, turnkey, source to destination logistics solution means you get to influence the entire process and that means the subject matter experts can really dig into the benefits, from the point of origin all the way to your gates and even on to your customer, so that everyone profits.
