3PL Perspectives
FAQs Answered
Shawntell Kroese | LOUP LOGISTICS
In the culinary world, the farm-to-table movement is the latest trend. But for 3PLs, the “port-to-store” movement is the trend to watch. What is port-to-store? And why should you care? Let’s answer these and the other most frequently asked questions about the movement.
What Is “Port–to-Store”?
Port–to-store is the management and visibility of a product from the time it leaves a manufacturer’s facility, throughout its supply chain lifecycle, until it reaches its ultimate destination, whether that’s a distribution center, brick and mortar store, or e-commerce retailer. When you’re fully engaged in the port-to-store movement, you’re well-versed in all of the factors that can impact that product as it moves from origin to final destination. As a 3PL provider, you can then use that information to advise your customers along their entire supply chain.
Is This a New Trend?
Even though “port-to-store” may be new to the 3PL conversation, it’s actually not a new thing. This type of supply chain has been around since intermodal transportation began in 19561 – more than 60 years ago.
So Why Are We Talking About It Now?
The reason port–to-store supply chain management is just now gaining prevalence is that it’s never been more important than it is in today’s global economy. The interconnected nature of the world we live in today makes forecasting and supply chain management at a global level critical to long-term success as a manufacturer and ultimate retailer.
Think of your daily interactions as a consumer. For example, let’s talk about tennis shoes. Most of us know where our favorite brand of shoe is manufactured, and we know where, or how we like to purchase those shoes, whether online or at a favorite store. What we may not know (or until now haven’t paid attention to) is each step of the journey these shoes make between the manufacturing line and our closets. But what we pay for our favorite shoes, how quickly we’re able to purchase them, and even the consistency in product quality upon delivery can be impacted directly by the supply chain. Having full port-to-store visibility allows you to identify problem areas, improve processes, eliminate waste and maximize quality assurance – and those are benefits that ultimately get passed to both your customer and the consumer.
The outside influences impacting those decisions are only growing more complex as the days tick by – think autonomous vehicles, the Amazon Effect, and e-commerce. They’ve all changed the face of consumer goods transportation and sales.
Why Should I Care?
Your business, as a logistics provider, isn’t just to care about the freight you can move in an intermodal container from point A to point B. You’re in the business of maximizing transportation spend and consumer penetration, while also minimizing risk and eliminating waste. The only way to be holistically successful in an arena of global scale is to embed yourself in the entire supply chain of your shipper.
What’s the Risk of Continuing with Business as Usual?
Doing things the way you’ve always done them might yield a certain measure of success in the intermodal space. But the status quo rarely leads to skyrocketing results. If you want to be a cutting-edge, logistics partner of choice, gaining an understanding of your customer’s entire supply chain is an important step to take.
Here’s the deal: shippers today depend on their logistics providers to be their trusted partners in decision making when it comes to their transportation spend. The outside influences impacting those decisions are only growing more complex as the days tick by – think autonomous vehicles, the Amazon Effect, and e-commerce. They’ve all changed the face of consumer goods, transportation and sales. Saying the world today is vastly different than the 1950s is a gross understatement. So why would you want to do business the same way you did more than 60 years ago? You shouldn’t.
How Does My Knowledge of Port-to-Store Help My Customer – and Me?
International trade regulations, import and export tariffs, driver regulations, economic impacts of policy, currency valuations, environmental focus and human capital are all factors that your shipper should be considering when developing their transportation plans. You can bring these factors to your customers’ attention – and your knowledge can be a key differentiator between you and your competitors.
If you’re not exposing your customers to the myriad of factors affecting their supply chain, or providing your recommendations, what might they miss? How might NOT considering these key variables impact their cost of doing business, and on a larger scale, their ability to compete? Could your lack of presence in those conversations lead to an ultimate differentiator that enables a competitor to overtake market share? Or risk your shipper from staying competitive in business?
This gets back to our example of tennis shoes and the interconnected nature of our global economy. Many factors outside of the tennis shoe company’s control could impact production costs, speed-to-market and sale price. But being informed can help. For instance, knowledge of an oil shortage might give them a heads up that the cost of rubber is predicted to increase. Likewise, understanding changes in overseas import tariffs would alert the company that the cost of vinyl is also likely to rise. Or, a more concrete example: understanding how the ELD rule has forced compliance with hours of service laws and made truck prices skyrocket would prepare them to properly budget for truck transportation (or seek more cost effective alternatives like rail).
When the tennis shoe company is aware of these factors, it empowers them to navigate the challenges to the best of their ability and stay competitive in their markets. But without that knowledge, it could negatively affect the cost to produce and distribute their tennis shoes – and worse, it opens the door for competing brands to have a competitive advantage, and could even put your favorite shoe brand out of business.
What Steps Can I Take?
Simply put, take a seat at the table. Do your research, get to know the risk and opportunity along the entire supply chain for your customer’s products, and act as the advisor your shipper can’t live without. Full visibility to the supply chain gives you the perspective needed to empower your customers through thoughtful solution development. Your flexibility and reach will help your customer remain competitive in an ever-changing landscape. Differentiate your customer as the shipper who’s here to compete with agility in today’s market, not the market environment of the 1950s.
Technology is another way you can gain insight into your customers’ supply chains. Today, real-time visibility along the entire supply chain and across modes of transportation is a reality. If you’re not accessing that critical data, you’re missing out.
Being aware of where your customers’ shipments are, when they will arrive, and being able to anticipate potential hiccups is a must in today’s world. It’s more important than ever to make the move from siloed technology to truly taking in the big picture. In a capacity-constrained environment, turning inventory, seeing all of the moving parts – and in one place, thanks to advanced technology – is critical.
Shawntell Kroese is Vice President at Loup Logistics based in Omaha, NE. For more information, contact Loup Logistics at [email protected]
Reference: http://www.worldshipping.org/about-theindustry/history-of-containerization/the-birth-of-intermodalism
