10 July 2017
By Rob Freeman, Commercial Manager, DP World Southampton
Supply chains are increasingly complex and remain a vital part of a retailer’s profit and structure. However, for most retailers, one part of the supply chain that is constantly overlooked is the port of discharge.
Retailers either outsource this part of supply chain planning to a 3PL or their carrier (shipping line). They don’t know or don’t care which port their goods come through, they just want a guarantee that it will be delivered to their DC on time.
But shoppers can’t buy a product if it isn’t on the shelf. Seems obvious, yet in-store availability remains one of retailers’ biggest challenges to efficiency. If they examined a port-centric logistics approach where moving products from the container ship through our port and distribution services, they can realise significant time-to-shelf benefits and meet retailer’s back orders and product launch dates.
For Marks & Spencer and Peacocks, the fashion retailer (part of the Edinburgh Woollen Mill Group) choosing the right port has reduced their inland delivery window by two days. A retailer’s supply chain decision-making process is about velocity that is so critical to success in today’s fast-paced, fast-fashion and seasonal markets.
All retailers understand the importance of the last mile in their delivery supply chain. The port IS the last mile in your ocean freight supply chain. So why are most retailers and manufactures not paying attention to this?
Speed is king, or is it?
It’s all about speed and getting goods to market fast. Today, online shopping has empowered the consumer to find and order what products he or she wants faster than ever. Retailers that can respond to these needs are able to leave other players in the dust. In the ocean freight supply chain this means transit time – how long it takes a vessel to complete its journey from A to B.
Logistics managers or ocean freight managers have a choice, usually, between more expensive and quicker sailing times from Asia down the competitive scale to slower transit times but a lower price.
Sometimes the cargo you are importing, like perishable goods or those with a limited seasonal life span, will determine the route to market retailers choose.
But for shipping lines, slow steaming is now the norm and not the exception. And, unless you have a crystal ball, unpredictable factors like weather, geo-political changes and now cyber-attacks (sorry, Maersk) are all risks which can upset the equilibrium.
Turning negatives into positives
As all good retail and customer service training tells you; if you can turn a negative experience into a positive one - that can lead to loyal customers and increased business or profit for the company.
That’s exactly what happened with M&S. At a time of difficulty for M&S and lots of frustration around poor port performance, we listened and worked with them to focus on their specific pinch points and pain points.
Inland lead times reduced by two days!
There was no silver bullet solution it was more simple than that. We got to understand how their business works and they developed a better understanding of how we work.
We gave them knowledge and insight which, in turn, gave them the power to challenge their supply chain partners as well as us. It was a win win.
Now M&S has reduced their inland distribution lead time by two days allowing them to get product from warehouses to shop floor or customer door quicker.
Better visibility = better planning
It’s the ‘set up’, the transparency and the relationships we have enabled that makes them want to ship more produce through Southampton.
Every customer who ships through DP World Southampton has complete visibility of their produce from ship to shore with our (DP World’s) online where’s my container? tool. It makes it really easy to see when the box will be discharged, where it is and when it’s ready to be picked up. You get the complete picture.
De-risk your supply chain
Retailers prefer to have options within their supply chain by not routing everything through just one port; never put all your eggs in one basket as the old adage goes.
DP World is the only port operator in the UK that has two deep-sea terminals. DP World London Gateway on the Thames is Southampton’s sister terminal.
We can provide shippers with a two-port strategy and both ports provide operational back up for each other, so taking the risk of vessel delay or congestion out of the supply chain and allowing retailers to improve inventory availability.
Fixing the odds
Shipping transit times will always vary and if you don’t want to play port roulette then heed the words of a Greek philosopher.
“The whole is greater than the sum of its parts” Aristotle
Retailers need to balance all the factors not just speed to market but cost, service and that illusive je ne sai quoi quality. Adopting a customer centric approach has allowed us to help our retail customers gain a competitive advantage. Our customers tell us that we just get it, and our set up is good as we understand where the risks lie in their supply chain and what we can do to optimise every link.