When it comes to international freight shipping and procurement, brands may focus on cost savings in a single leg of the supply chain without considering the full, landed costs.
When it comes to international freight shipping and procurement, brands may focus on cost savings in a single leg of the supply chain without considering the full, landed costs.
In today’s global supply chain, the importance of international freight shipping cannot be overstated. Brands are constantly seeking efficient and cost-effective methods to procure and import the highest quality products, and often rely on port-to-port shipping – a strategy that seems lean and affordable at first glance but could lead to challenges in the supply chain that emerging businesses need to carefully consider.
In the video below, Louis Kill, Senior Manager of Transportation Solutions at Ware2Go, explains the key differences between port-to-port and port-to-door planning and how big picture thikning and true partnerships create a win-win scenario for fast-growing businesses.
Optimize costs and reduce time management with an end-to-end solution.
The key takeaway is that while port-to-port shipping has its merits, it is crucial for businesses to understand the broader implications of this strategy. Finding the right balance between cost efficiency and operational effectiveness is imperative. Ahead, we’ll delve deeper into each of these challenges, offering insights into overcoming them for sustained growth and success.
A port-to-port strategy for international freight shipping may seem to be the most affordable approach at first glance. However, fast-growing businesses opting for port-to-port shipping may only be looking at a single leg of the supply chain and could face more costs down the line. Why? An overemphasis on the current ocean freight rate often distracts from other costs associated with the complete logistics process.
A common pitfall merchants make is assuming the cheapest shipping method (port-to-port) along with an affordable ocean freight rate must make for the most cost effective strategy.
But that simply isn’t true: port-to-port increases the number of touchpoints and parties involved. Without a streamlined process, it can be difficult to spot where cost-saving can occur throughout the entire supply chain.
Below are three common problems that emerging brands face when choosing port-to-port for international shipping:
The strategies you use to minimize ocean freight costs now will end up costing you more further down the supply chain. For example, locking in a lower ocean freight rate by bundling product into fewer shipping containers will increase drayage and intermodal costs.
Likewise, shipping all inventory to one port could mean missing out on optimizing for time and transit (TNT) if you are distributing inventory across multiple fulfillment nodes.
International freight shipping often means trusting a freight forwarder or third-party logistics provider (3PL). Without the right 3PL partnership, emerging brands may lose transparency and control in their supply chain. This is because multiple touchpoints and involved parties increase red tape around contracts, communication, and transportation logistics. With an all-in-one logistic partner, emerging brands can have a streamlined experience with cohesive inventory tracking.
Complying with foreign trade laws and customs regulations can be cumbersome for growing brands. Between invoices, certificates of origin, and customs declarations, team members may spend hours of their day on compliance. Meanwhile, time spent away from core competencies is already a top concern for business decision makers. A recent report found that 45% of merchants would like to divert their team’s time away from logistics management and back towards their core competencies.
As businesses expand into omnichannel sales they have a choice to make: devote more resources to fulfillment or outsource their fulfillment needs. With the right 3PL, merchants get a partner who can:
For those seeking a holistic solution to international freight shipping, embracing a door-to-door approach supported by comprehensive logistics support can be a game-changer. If your business is growing, now is the time to learn more about international freight shipping and your freight logistics options.
Have more questions about freight shipping? Check out our complete guide to all things freight.