October is traditionally the busiest month of the year when it comes to traffic at the major U.S. container ports, and this year looks to be a record-breaker, according to Paul Bingham, economist with market analyst firm Global Insight. Activity could be up as much as 4% in October.
While the physical limitations of port and transportation infrastructure are beyond a manufacturer's control, there are some tactics companies can take to ensure their goods flow smoothly from point to point. Arnie Bornstein, executive director of marketing and corporate communications with BDP International, a global logistics services provider, offers these suggestions for shipping products into and out of the United States.
Companies can achieve better supply balance by negotiating with various ocean carriers that have relationships with terminal operators in multiple ports, Bornstein notes. "This can provide viable options for your inbound and outbound supply chains without significantly impacting your costs."
Transportation Demand Planning
"Profile your company's global carriage activity across various trade lanes and strategic business units to reduce duplication and inefficiency," he says. "Longer transit times between points of origin and destinations can be more successfully navigated by forecasting your demand and proper pre-planning. Build these profiles into transportation procurement and contracting processes."
Strategically managing your inventory (also known as inventory-in-motion) by monitoring supply and demand during inland transit at the origin or destination can yield greater flexibility, Bornstein observes.
Change is Good
One thing that manufacturers and transportation carriers alike learned in the wake of the West Coast ports strike of 2002 is that they can always go to other ports of entry. To this day some companies have not returned to the Ports of Los Angeles/Long Beach, the busiest ports in the United States, choosing to either enter the country through other West Coast ports or to bypass the West Coast entirely in favor of Gulf ports or East Coast ports. Bornstein also notes, "2008 is a new contract year for West Coast port operators and the International Longshore and Warehouse Union," so plan accordingly.
Inside the Beltway
"Capacity constraints and antiquated labor work rules at U.S. and European ports, gridlock and massive delays are inevitable," he says. Manufacturers, carriers and all other interested parties need to communicate their concerns to the powers that be in Washington.