With supply chain demands ever increasing, as well as new high-tech solutions allowing for real-time visibility, it is no surprise that the physical infrastructure itself has a hard time keeping up. More and more, ports, airports and rails are becoming bottlenecks for the freight industry.
So, if you want your goods to be delivered efficiently and on time, the effects of these bottle necks on your supply chain must be accounted for. Below, we’ll discuss some key bottlenecks and how to manage your freight tenders to account for them.
While global cargo volumes continue to rise, airport infrastructure, including everything from ground crew labor to taxiways and gates, has struggled to keep up.
If you’re a frequent user of one of the major airport hubs of the world, you will surely already be well experienced with major delays. Reports show that, at places like Frankfurt and Chicago for example, delays of around half a day are commonplace.
Seaports face many of the same obstacles as airports, which translates into similar challenges to supply chain managers. Not only can vessels be required to wait several days to enter the port, but once cargo arrives in port, it can get stuck for days, weeks, or more. This creates uncertainty and delays that trickle down through the entire supply chain.
On the other side of the port, truck drivers entering port have sometimes have to wait hours upon hours to unload, in turn drastically lowering the usage of truck fleets on the road.
One thing that separates rail congestion from air and sea is that it is not localized to a single point. Your entire journey from A to B is tied to a potential hazard for delays. Again, with demand rising and upkeep of infrastructure being left behind, delays in rail traffic has seen a significant uptick over the last number of years, exemplified by the fact that it can take days for a single train set to go from one side of a city to another.
And to make matters worse – with rail being an interconnected network, delays due to congestion will snowball across regions, causing delays for goods that might not even be headed for the congested area.
Tendering with bottlenecks in mind
So – how can you make sure that you are spared from the issues of congestion? Well, a good place to start is to make sure you take it into account when tendering your freight contracts. Specifically, these are some things to keep in mind:
1. Question the necessity of using these specific routes and transport modes to deliver your goods. Can you use other forms of transport for part of the way? Dissecting your routs is a good exercise not only to understand your flows better, but to create the most secure delivery chain possible.
2. Contract backup solutions when tendering your freight contracts. By proactively diversifying your supply chain with a variety of carriers and routes, you are to some extent ensured against planned, as well as unexpected, congestion issues that arises during the freight process.
3. Obviously, with bottlenecks being the kind of issue that they are, a lot of energy is spent on a federal level around the world in expanding and “building away” these issues. This, on the other hand, means major development projects coming up on a lot of these bottlenecks, promising even worse conditions over a period of time. If you’re shipping large quantities of goods, make sure that you are aware of upcoming projects that may disrupt your supply chain over the foreseeable future before you decide on a carrier and a rout to commit to.
4. And lastly – when delays hit you – make sure you have a solid contingency plan in place. Create a set of rules for how to act in case of major delays together with your supplier already in the tendering phase. Evaluating and building a strong relationship with your carrier from the tendering phase all throughout the business relationship is vital to overcoming not just congestion related issues, but any unexpected issue that might come your way.