UNDERSTANDING OVERSEAS SHIPPING.
Consumers have definitely felt the brunt of the supply chain backup of late. In the form of delays, higher prices and general unpredictability when ordering. Of course, businesses are the first to experience this and they’re fighting tooth and nail to get the supply chain situation solved. To keep their loyal customers satisfied and, ultimately, to stay in the black. The problem is threefold. 1). The lead time from Far East, including Vietnam, Malaysia and China, has drastically increased. 2). The boat-to-dock-to-truck process is taking double the amount of time. of the virus. And 3) There’s not only a shortage of products and containers, but also of container ships.
So, what does this all add up to? Oceanic freight has—brace yourself—QUADRUPLED in cost. Rates to ship from China to the US have surpassed a record $20,000. And newly reported positive Covid-19 cases in China have recently forced the country to re-introduce restrictions. Which means, you can expect delays due to quarantine from 14 to 28 days. To read more, check out the ZeroHedge article, here.
“While it is unclear how long these measures will be in place for, they will likely tighten the dry market in the near-term.” —Braenmar ACM
If you’re relying on overseas supply chain, the situation is going to continue to be a challenge for the foreseeable future. But if you think about sourcing your products domestically, that’s a great place to start. And with the right partner in your corner (i.e. Ernest), there are ways to weather the storm and stay ahead of the game.
TRADE ROUTES HIT ROUGH WATERS.
U.S. ports are backed up, the cost of containers is on the rise and the availability of both containers and the container ships themselves is limited. In short, the demand for shipping space has exceeded what’s available. This means it’s becoming increasingly more difficult for goods to make the journey across the Pacific and Atlantic oceans. In addition to these shipping issues, factories in Asia are scrambling to keep up with the massive demand from the western hemisphere. The result? It hits businesses and their customers where it hurts the most: the pocketbook.
BUILDING SHIPS, BUILDING INDUSTRIES
The first question is, “Why can’t we just source it locally?” For starters, most industries in the U.S. no longer make those mass-produced items because they simply can’t compete with Asian countries on price. The next question is, “Why can’t we build ships to accommodate the demand or better yet, rebuild those industries stateside?” The good news is that we can. But this will take time. It takes at least a year to build a ship and even when it’s completed, there’s still the issue of the container shortage. The last question is, “How long would it take to build an industry on domestic soil or retool an existing one?” The answer, unfortunately, is a long time. However, the fact that we’re asking these questions is already a sign of positive progress—necessity being the time-honored mother of invention.
DECREASE SHIPPING COSTS. BOOST YOUR BRAND.
Decreasing costs and building your brand is where Ernest can lend an economical hand. We start by taking a look at what packaging materials you’re using and developing ways to use less and decreasing the size and weight, all while keeping strength and protection top of mind. This can help offset some of the recent surge in costs. Our next step is focusing on the who, and that who is you. We’ll redesign your packaging to make your brand front and center so your box isn’t just a container. It will become an extension of your company, which will boost both recognition and reorders. Another way Ernest can help ease the constraints of the current supply chain issues is by a simple consultation of how your team is boxing and shipping your product. Whether it’s an automated solution or simply a more ergonomic experience for your employees, we’ll help you streamline to work smarter, resulting in savings.
JIT AND EMI — TWO ACRONYMS, ZERO HEADACHES
When your products finally arrive from overseas, you still have to figure out where to store all those packaging materials, right? Not necessarily. There’s no need to keep your warehouse packed to the gills with boxes and bubble wrap when you have a partner just down the street who can keep it on hand and on demand. It’s called Just-in-Time (JIT) delivery, and as the name suggests, this service is available any time—just a phone call or email away. So when your company does get that big order in, you don’t have to scramble to get packaging. Or if you’d rather have a partner on site who handles all of the inventory for you, we can help with that too. With Ernest Managed Inventory (EMI), our own employees will keep your storefront stocked, track your inventory and replenish it as needed. All it takes is a small space in your warehouse, but it frees you up to focus on producing your own goods—which can make a huge difference for your bottom line.
LET’S DO MORE WITH LESS, TOGETHER.
At Ernest we’re proud to offer these services. There’s no greater reward than seeing the companies in our community thrive, especially during the supply chain challenges happening today. Whether it’s a smarter more cost-effective packaging solution, our JIT deliveries, or EMI, we’re here to help you continue to succeed. If you’d like to learn more about any of these offerings, simply contact us at ernestpackaging.com/contact to speak with an Ernest Packaging representative and for a free consultation. Until then, remember: the best way to solve a problem is through the bond of a strong partnership. And together, we’ll keep adding to that tensile strength.