Do your homework
Edward Sands' commentary ( 'DIY container drayage,' March American Shipper, pages 2-4), contain some very good tips and suggestions on considering alternatives to through intermodal rates and services from your ocean carrier. But as many of us have learned, there are no easy answers to supply chain and logistical challenges. There are methods on how to get there, but it will be different for each business. Why? Because like snowflakes, no two business entities are alike.
That said, how do you approach do-it-yourself or any other transportation or logistical issue? First a thorough internal review is required. Start with your objectives, including: low-cost versus stringent service levels, operational considerations (number of doors, parking availability, hours of service, rail line service, etc.), human and mechanical assets, locations (in or near major population centers versus rural areas, exports versus imports, and volumes.
Once you clearly define the objectives, look at your specific circumstances, then consider alternatives. If you can effectively operate either in a DIY or use through intermodal rates and services, then you do requests for proposals reflecting that ability. Send the ocean carriers RFPs for through intermodal rate and service proposals, as well as port to port. Separately send RFPs to truckers, railroads, third-party logistics providers and brokers for the inland legs.
Once you get the responses to the RFP and go through the negotiation process, you’ll have answers that allow you to make the right decision for your company. And over time, those answers change because your service providers make different decisions based on their circumstances, just as your company’s circumstances change.
Even after you find the right solutions to achieving your objectives, don’t assume that you have a model that is good forever — challenge it frequently and ensure that each time you go through the entire process, from objectives through the RFP process. On numerous occasions I’ve gone into clients logistics processes and found a “solution” created two to five years before and hadn't challenged since — and it was producing in the wrong results under today’s conditions.
If it were simple, many more of us would be out of work. Low rates are not always the right answer; the fastest transit time is not always the right answer. DIY is not always the answer; through intermodal rates will not always be the answer. Do your homework, that’s what you are getting paid to do.
Gary Ferrulli
Global Logistics & Transport Consulting
Chandler, Ariz.