Current Issues

Regular Industry Development Updates, Opinions and Talking Points relating to Manufacturing, the Supply Chain and Logistics.

Cargo, commodity, cost and competition – how supply chain has become the edge

14-Nov-2017
Cargo, commodity, cost and competition – how supply chain has become the edge
When studying global trade, analysts often look at ocean shipping as one of the barometers of economic health. More than 90% of the world’s trade is carried by sea, according to the International Maritime Organization (IMO). If you have ever had the opportunity to tour a major container terminal, it’s hard to get over the sheer scale of the operation and just how much stuff flows through a single port.

Among the millions of shipping containers that are moved each year, a significant amount of those “boxes” are filled with raw materials such as paper, agriculture, metal, mining, and chemical products. These commodity products are the foundational ingredients that ultimately get made into the products, machines, and other things that make the world go.

Commodity shipments typically include heavy or bulky, high volume, lower value products. Container shipping is a vital component to these supply chains because it is so efficient and capable of moving vast quantities around the globe.

In the Journal of Commerce’s recent assessment of the top 100 US container freight exporters, all of the top 10 companies were commodities shippers, with volumes ranging from 78,000 to over 300,000 containers annually. These are vast and complex supply chains that must support trade between extremely remote locations and with the big urban manufacturing centres.

Commodity shippers have embraced technology
Since the product being shipped is not expensive seasonal apparel or next generation electronics, the cost of logistics takes up a sizeable portion of the product cost. This is why commodity shippers have to be masters of logistics spend control. The complexity of the massive transportation contracts, along with the drive for spend optimization pushed commodity shippers to become the pioneers in freight spend management technology solutions over a decade ago. These companies were the first to realize they could easily lower their logistics spend by 5-10% – a significant advantage in an industry where margins are under constant scrutiny.

Another huge dimension of the commodity supply chain is the connection to customer service and added value. If a manufacturing customer can’t count on receiving the raw materials it needs to produce its product, it can easily seek other options. The ability for a commodity shipper to reliably communicate delivery’s location and its expected time of arrival is crucial to the commercial relationship. This is where supply chain visibility comes into play. When a customer service rep at a commodity shipper is able to look up a container shipment and provide accurate status and ETA information, it has a tangible effect on customer satisfaction and overall brand reputation. Not to mention, visibility is the foundation to assuring supply is there when and where it’s needed.

Supply chains as a brand differentiator
Orchestrating such a vast supply chain is incredibly hard without technology. If a company is to be able to grow and prosper, product plus supply chain capability will separate the winners from the losers. That differentiation is why Marion Matthewman, head of global logistics at Syngenta, sought to transform her supply chain through enhanced visibility and connectivity between the agribusiness giant, its logistics partners, and its more than 400 million farmers scattered around the world.

“Our industry needs to be agile because farming is weather dependent, and so when the farmer wants his seeds to plant we need to have them there because there’s often very short windows and therefore we need to make sure that we can respond.” - Marion Matthewman, head of global logistics at Syngenta

In the commodities industry, failure to orchestrate on a massive global scale is a strategic differentiator. While the product being shipped may not be as sexy as the latest holiday gadget or spring fashion, the companies that ship the heavy volumes around the world have invested heavily in network-based technology solutions to keep the tonnage moving from all points around the globe. This is why we frequently see leaders such as Dow and Syngenta being profiled as supply chain innovation leaders at conferences and in the media. Failure in achieving supply chain excellence is simply not an option any more.

The Advantages of an Automated Artwork Management Solution
1 day ago
Half of English council spending goes to a handful of suppliers, risking another Carillion-sized failure
5 days ago
The Time to Modernize Your Artwork Management is Now
5 days ago
It’s time to bin receipts: ParcelHero calls for an end to wasteful paper receipts
6 days ago
Ocado sales jump thanks to 'automation done right'
1 week ago
Preparing your employees for Industry 4.0
1 week ago
How Do Product and Shipping Labels Affect Brand Visibility?
1 week ago
How will Brexit affect the events industry?
1 week ago
100 days to Christmas - ParcelCompare says it’s never too early to start planning those presents and orders
1 week ago
It’s time to blow up your business model and switch to DTC
1 week ago
How retailers can survive the death of the high street
1 week ago
ClickSoftware Announces Recent Customer Wins, Product Updates and Industry Accolades
1 week ago
Deloitte increases its focus on AI & Marketing Technology through new acquisition
2 weeks ago
How Centralized Labeling Helps QA Departments
2 weeks ago
How IoT is Changing the Waste Water Industry
2 weeks ago
M&A can put quality compliance at risk
2 weeks ago
Chinese traders must pay fair postal charges or more British retailers will collapse
2 weeks ago
Enhance real-time visibility across your operation with a proof of delivery system
3 weeks ago
Snapfulfil publishes top five tips for winning at warehousing
3 weeks ago
Government’s no-deal Brexit advice papers ‘are the equivalent of “duck and cover” nuclear warnings’
1 month ago
Brexit and Stockpiling: What’s the answer?
1 month ago
Peak? Which peak?
1 month ago
Empowering Your Supply Chain Workforce: 3 Tips for Manufacturing Directors
1 month ago
64 per cent of manufacturers rate their shop-floor IT capabilities as just average, weak or non-existent
1 month ago
The supply chain lessons of the modern grocer
1 month ago
Time to mitigate the risk of a ‘no-deal’ Brexit?
1 month ago
App Insights: How can artificial intelligence innovate supply chain management?
1 month ago
Managing Technological Change Without any Supply Chain Disruption
1 month ago
Moody’s Blues for House of Fraser; but Website Failings are Just as Damaging
1 month ago
Artificial Intelligence: What’s Now And Next In IoT-driven Supply Chain Innovation
1 month ago
Indiana Jones and the supply chain bullwhip effect
1 month ago
How Enterprise Labeling Helps You Conquer Regulatory Challenges
1 month ago
3 Tips for Empowering Millennial Warehouse Workers
1 month ago
More robots means easier delivery - but what about the infrastructure?
2 months ago
Safety in the warehouse: Five key risk areas for 360-degree protection
2 months ago
Automotive resilience, not just airbags and crash tests, but IT too
2 months ago
New High Street panel is facing a race against a terminal diagnosis
2 months ago
Delivering the supply chain revolution
2 months ago
A market of one: the potential of the personalized supply chain
2 months ago
5 EIS rules you are probably not aware of
2 months ago
TMS: an enterprise priority
2 months ago
Labeling Solutions for Global Expansion
2 months ago
Prime Day will be a $1.6bn loss-leader creating millions more Prime members, says e-commerce expert
2 months ago
Say what? The new possibilities of voice and machine driven retail
2 months ago
‘Peak faith’ in the cloud only 12-18 months away with slump to follow, warns 6point6 Cloud Gateway
2 months ago
As you were for UK manufacturing sector, but new business growth at three month high
2 months ago
Back to IoT basics: Automating outcomes to improve customer experience
2 months ago
Investigation of the "Fast Fashion" impact
3 months ago
Redefining Rental for Materials Handling Equipment
3 months ago