One of the biggest challenges for any business owner is managing fluctuations in demand and the peaks and troughs that result. In peak seasons, the mission for the supply chain manager is to ensure sufficient products are flowing to customers to meet demand. When a trough occurs, controlled and efficient inventory planning is essential to avoid issues such as obsolete inventory and the subsequent locking up of capital.
To overcome these potential problems, the supply chain needs to be flexible, and provide cost-effective, timely supply and control of product flow. Sea freight can meet these requirements if it is used sensibly and planned carefully. The services of an experienced sea freight forwarder can be invaluable in ensuring the optimum outcome. Read on to find out how you can be prepared for any challenges in your freight operations.
Upsized carrying capacity
Compared to air freight services, sea freight provides greater carrying capacity for managing your peak seasons supplies. The huge vessel size of cargo freighters allows shippers to consign an entire shipment in one go, rather than breaking it into multiple small consignments to suit the limited capacity of air freight carriers.
This gives you an advantage in terms of shipping being a single process (with one-off charges), which reduces complexity and assists in managing costs. Sea freight forwarders can also assist with cost-effective warehousing at your landing destination. This enables you to build the required inventory for replenishing supplies to your customers when the demand rises.
Effective demand synchronization
Sudden changes in the market are the most common reason for demand fluctuations, but it can be difficult to identify without careful scrutiny. The long transport time frames of sea freight buy you time to carefully analyse potential demand patterns and allow you to plan appropriate actions to ensure an adequate pipeline of stock.
While air freight offers the fastest response time, any mistake in the paperwork caused by haste may end up costing you in terms of detention of cargo. When demand suddenly falls, the other benefit of sea freight is that it is cheaper to hold the shipment at a port than it is to hold it at an airport.
The successful and cost-effective pipeline control
Proactive managers know when their business is likely to peak or slow down, which makes it easier for them to identify peaks and troughs in demand. Aligning these expectations with sea freight scheduling assists in creating an appropriate product pipeline and ensures timely replenishment of inventory.
This type of planning enables you to meet demand while at the same time reducing the need to maintain an over-sized inventory at either the point of origin or the end market destination. Not only does that ensure you can keep your customers satisfied, but it also keeps supply chain costs low.
Reschedule or postpone while in-transit
Sea freight is also useful while using rescheduling or postponement as supply chain strategies. If at any time a manager sees that demand is suddenly increasing and shipments need to arrive more quickly, part of a shipment can be withdrawn at an interim seaport and sent via air freight to meet demand while the rest of the consignment arrives by sea as originally planned.
Likewise, if at any point of time demand starts going down, the shipment can be postponed by storing it in a port warehouse at an interim port and then carried on other ships with longer transit times. This proves a highly cost-effective solution that is used by many large companies across the world.
However, the execution of both these strategies has to be planned and managed with a high degree of precision. Partnering with an experienced sea freight forwarder can be of great assistance.
Smooth and hassle-free shipping
Sea freight is considered the smoothest and easiest cargo transport mode. It allows you to ship just about anything regardless of size or shape, even many hazardous products as long as the proper documents are completed and applicable rules and regulations are adhered to.
By contrast, due to reasons including security concerns, air carriers have strict rules about what can and cannot be consigned, including limits on size and shape. Not abiding by these rules can increase the chances of your freight having its booking cancelled – which in turn means not being able to meet any peak demand you were possibly planning for.
To avoid these kinds of hassles, logistics managers use sea freight as a preference for riding out peaks and troughs.
Navigate market shifts like a pro
Managing peaks and troughs can be a walk in the park if the right approach is taken. It is also the secret to staying ahead of your competition by ensuring low cost solutions that give you fast response times and keep your customers satisfied. As well as having the skills, resources and a well-planned strategy, opting for sea freight and partnering with an experienced sea freight forwarder that can navigate the various requirements including customs, warehousing, and supply chain integration will see you achieving the optimum flow of products to your markets.
It is important to align with a freight forwarder that will assist small, medium and large businesses to achieve an optimum logistics solution with warehousing, transportation, and air and sea freight services to and from the major ports in Australia, including Brisbane, Sydney, Melbourne, Adelaide and Fremantle (Perth).
Download the free eBook: 4 Common Freight Challenges of Australian Importers Solved with Buyer’s Consolidation
Topics: Sea Freight, Freight & Transportation