The top issues in FREIGHT & LOGISTICS right now … PASA CONNECT online Roundtable – 30 April 2020
About the Round-table
Moving stuff around at the current time is the lifeblood of the nation. Supply chains are keeping us going.
But how are we keeping them going at the time of a national crisis and lockdown? What are the prevalent issues – new & old – that we are dealing with to keep going?
This was the topic of the PASA CONNECT Roundtable on Freight & Logistics with a group of category specialists and procurement managers discussing the ‘roadblocks’ of today.
The ‘old’ freight & logistics issues are the same ole to some degree – best summed up by the two ever-present measures of supply chain delivery = COST to Serve, TIME to serve:
But, also discussed, an articulate summary of a Top Six issues from our expert, Jo Barlow from Cochlear, with their substantial annual spend in freight gone to market only recently:
1. That there is no easy solution to this category – understanding that it is a dynamic category is important; constantly changing and supply/demand driven with no universal answers
2. Hidden costs remain the biggest challenge for professional BUYERS – surcharges, incorrect addressing, fuel (even now), import costs, etc …
3. Knowing your own needs & strong demand management of your own shipping profile is key; do you need that platinum delivery service (before 9am) or will standard (3 biz days) do this time?
4. Global v regional strengths and weaknesses of providers – which is best for you?
5. Technology – your own supply chains are hugely DATA rich but INFORMATION poor … this is a key area to mine to make your supply lines much more efficient quickly : without massive tech costs too
6. Relationships (and SRM) are hugely important to getting things done in freight; many blockages often appear, and need fast unblocking: Handy consultants on individual aspects are often worthwhile.
The ‘new’ issues, prevalent in this category during Covid-19 these last few weeks, cover a myriad of questions and speed-bumps to current supply lines and included:
1. The massive reduced capacity of air freight including import/export capacity imbalances affecting prices – with sudden surcharging or plain non-delivery being experienced by many
2. The Amazon effect in the USA: ‘Amazon Shipping’ suspended, their business switched from FedEx to UPS, shifting volume availability massively & therefore price + capacity availability
3. Europe – closed borders have illustrated that the BREXIT issue has not gone away, and will return with major issues likely in the near future post-Covid-19
4. The ‘ripple effect’ of the Coivd-19 crisis will dramatically affect shipping, freight and logistics (and price/availability) for at least the next 12 months – there are good spot buys for those that know!
5. Established relationships (and previous SRM efforts) are what got some things delivered (including PPE) when others couldn’t get them: SRM is worth investment in this category
6. Shippers, on the other hand, are seeing the crisis in part as a way of them lifting margin – surcharging is rampant currently, and reduced capacity very real.
Jo Barlow is the head of indirect procurement at world-class Implantable Hearing Device company Cochlear in Sydney.
She had deep hands-on knowledge and experience of this category, having completed major projects in this spend line in the past.