Flexibility, realistic timelines and booking early are some of the strategies automotive aftermarket suppliers can utilize to take on freight challenges, according to an expert.
Brandon Kraal, senior vice president of international at eShipping, a logistics and transportation management company, gave a list of actionable steps as COVID-19 continues to provide challenges to the aftermarket in terms of getting items shipped from overseas.
Home consumables were and continue to be in high demand, taking up space on containers and clogging up shipping ports, he explained during the Sept. 1 edition of the Automotive Aftermarket Suppliers Association’s Supply Chain Webinar Series.
While his recommendations won’t solve all problems, he acknowledged during the session, Global Aftermarket Supply Chain Logistics: Dealing with Freight, but they may be helpful.
One step is to be flexible. Easier said than done, Krall admitted.
“I know it’s difficult and I know it’s probably easy for me to say, but just establish realistically times,” he said.
That’s because transit times are so much longer than they used to be. For example, transit from Shanghai to Chicago was historically a 35-day journey.
Brandon Kraal, senior vice president of international at eShipping,
“Now, it’s 73 days,” he said. “Ocean shipments are now arriving from China, on average, 42% [later]. Vessels out of Asia, in general, are being delayed around 20 days. Even in … electronics, and we’ve all heard probably the computer chip and the chip shortage, something used to take one to two days is now taking 10 to 12 weeks to actually get that delivered.”
Another recommendation was to book early. It’s something he tries to impress upon clients to do as best they can.
“Really stay on your suppliers and continue to remind them to try to book at least four to six weeks in advance of what they would call a ‘cargo ready date,’” Krall said. “It gives a better opportunity to secure space, the earlier the booking can be made.”
Suppliers also need to be flexible when it comes to where your shipments are sent from.
“And I’ll just say this: Be flexible, be flexible, be flexible,” he emphasized.
He used the example of if you’ve always shipped out of Ningbo, China, let your forwarder or ocean carrier use Shanghai interchangeably.
“They’re pretty close. There’s only about a $50 difference in origin charges. But that will give you access to additional capacity at a different port,” Krall said. “Or if you’re in South China, say you historically have used Yantian. You might want to look at Nansha, or Chiwan or Hong Kong. Just widen your scope, widen your lens to improve your chance to secure a booking.”
Flexibility is also needed in warehouse scheduling. Drayage companies are in a battle to keep drivers, for one. But another issue is that a driver will arrive to pick up a container in the morning and be stuck in a mile-long line. By the time they close to the front, there are no more chassis available.
“So be flexible. Because it’s so difficult now to keep delivery appointments due to all the congestion, shortage of drivers, shortage of equipment,” Krall said.