Planning your supply chain for 2016
Planning for 2016
As we enter into January, attention is now turning to the forthcoming year, and those important plans for maintaining and growing your company market share over the next 12 months.
If your company is dependent on imports or exports, what should you be doing to pre-plan for your supply chain to be prepared for the year ahead?
Slow-down in global trade
2015 has brought an unpredictability to the global marketplace. The slow-down in global trade, specifically in regards to exports from China, and increasing capacity in shipping has impacted upon the transportation of goods, highlighting the necessity for companies to pre-plan their shipments.
Shipping capacity has more than doubled in the past 10 years; largely thanks to the introduction of mega vessels capable of carrying over 19,000 TEU. The global slow down and larger ships has led to over-capacity on key trade lanes such as Asia to Europe, which has led to a decrease in freight rates.
To offset this, shipping companies are decreasing availability, withdrawing services predominantly on the Asian – North Europe trade lanes. Advanced vessel planning is crucial to ensure you can arrange your shipments for when you require, especially in view of early February when Chinese New Year means factories can be closed for several weeks.
Benefits of using a Freight Forwarder
The benefits of utilising the services of a freight forwarder or 3PL such as Velta can help to overcome many of the issues being brought about by the current situation.
Due to the regularity of shipments, freight forwarders often have pre-agreed space allocation aboard vessels, meaning more chance of your shipment being made according to schedule. With regards to your requirements around skeleton shipping periods, such as Chinese New Year, an experienced freight forwarder will be able to assist you in planning ahead, to avoid disruption to your supply chain during such times.
If you are able to manufacture and ship stock across to the UK in advance of requirements, storing these in a customs bonded warehouse enables you to defer the payment of tax and VAT until the products are sold, ensuring the effect of cancelled shipping schedules and holiday periods has minimal effect on your product.
Planning for export
The importance of planning cannot be overstated. But that’s not to say every company gets it right every time.
Consumer demand from Black Friday last year in the UK was vastly underestimated; leading to stock shortages.
Retailers were better prepared this year. But if you find yourself in a situation where you don’t forecast demand, how can you ensure stock is here on time?
Freight forwarders can offer alternative methods of transportation for time-critical goods in order to meet demand.