Reduce Risk in Your Global Shipping Strategy With Vendor Management
Trying to coordinate deliveries to make sure they arrive on time can be a stressful job in today’s volatile shipping landscape.
You need to contend with unexpected shipping cancelations by carriers that are trying to stay profitable. Unpredictable rates caused by too many or too few vessels available at any given time adds to the uncertainty. And if you don’t have complete visibility across your global supply chain, your job is only harder.
Many shippers have found peace of mind by using a global vendor-management program, which combines PO management, global visibility, and shipping consolidation. The program can help you make sure freight arrives on time. And it can help you bring greater savings, consistency, and security to your shipping strategy.
How the Program Works
With a vendor-management program, a logistics provider helps manage both your POs and your global flow of cargo, while serving as a single point of contact between you and carriers.
As POs come in, the provider can calculate when cargo will be picked up and continue to verify that timing as delivery dates near. The provider can also use consolidated shipping to combine your partial shipments with others to create full shipments. This can help you get shipments to their destinations on time, and do so cheaply and efficiently.
With a vendor-management program, you no longer need to arrange multiple order pickups or worry about orders not being ready for pickup.
Instead, you can use the provider’s transportation management system to monitor your current order and shipment statuses in real-time, and see exceptions down to the item level. And if you encounter increased demand or last-minute supply chain outages, you can use the system to reroute freight.
3 Key Benefits to Your Business
A vendor-management program offers you more than the comfort of knowing that your shipments are in good hands. It can also improve your global shipping strategy to help you realize some key benefits.
Lower Costs: There are clear cost benefits of using consolidated shipping. You only pay for the volume of a container that you use rather than paying for a full container that you may not fill. Combining multiple shipments into one can also reduce your customs entries and terminal charges, deliveries, and handling fees.
And the savings only start there. Because you can reduce your supply chain spend even more when you combine a vendor-management program with a provider’s transportation, logistics, warehousing or customs services.
Better Consistency: Global supply chains have more opportunities for service failures. A single point of contact can give you answers and offer alternatives before service failures happen. Customs entries can also be processed more consistently. And fixed weekly schedules that have known transit expectations can make it easier to track your orders.
Greater Security: Less-than-truckload and less-than-container-load freight faces the risk of theft and needs to be secured.
With a vendor-management program, a provider can accept your containers for unloading, consolidation, and reloading. And they can pick up containers at ports and bring them to their facilities for faster, more secure customs clearance. Providers can also run CCTV and seal containers to reduce theft risks.
Choosing a Provider
Make sure the logistics provider you work with can not only understand your unique needs but also turn them into solutions.
For example, shippers have different levels of risk exposure. Limitations of liability, terms, and conditions, and cargo insurance options vary by mode of transport, service type and country.A logistics provider can help you uncover potential liabilities in your supply chain and prepare to manage costs associated with cargo damage or loss. This is why it’s important that you use a provider that has in-house risk-management professionals.
The right provider can also help you manage your regulatory challenges and combine vendor management with your other logistics needs for greater efficiency. Additionally, with businesses, suppliers, and the solutions provider integrated onto the same technology platform, you can gain clear visibility to overall inventory, maintain lower transportation costs, and help ensure on-time deliveries.
Countries require compliance with their own specific set of customs rules, governmental regulations, VAT, duty rate calculations and payment schemes. Even small errors like misspelling on a declaration can lead to fines, penalties or even cargo seizures. For this reason, it’s critical that the logistics provider you choose has regulatory experience in the markets where you do business.
Tailored to Your Needs
Vendor-management programs can be structured in different ways based on what you want to achieve. You could customize it to deliver freight from multiple global suppliers to multiple customers. You could also source all freight for a single company. Or you could use a highly efficient merge-in-transit approach to ship products directly from vendors to customers.
Whatever approach you choose, the end result is the same: Efficient and cost-effective control of your global freight so it arrives on time, wherever you do business.
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