Warehousing and Distribution
Article | June 16, 2023
Even though there are distinct differences between demurrage, detention and port charges, many are still oblivious to these differences and there have been several questions on this blog relating to these charges.
This article is about how demurrage, detention, and port charges work.
International Trade and CostsWhen it comes to international trade, majority of the buyers and sellers use Incoterms to decide what each other’s responsibilities and liabilities are in terms of the business, especially related to costs.
Generally, there is very little room to manoeuvre in terms of additional and unbudgeted costs incurred on the shipment and therefore in their own interest it is important that the buyers and sellers take necessary precautions to ensure that all known costs relating to the business are discussed and finalised before the shipment commences.
There are many entities involved in the process of shipping a container from Point A to Point B, each with their own cost component, all of which have to be covered either by the seller or the buyer.
Demurrage, detention and port charges are just some of these costs that may be applicable in a shipment.
While some of the port charges are valid and unavoidable, demurrage, detention and some of the port charges (like port storage, early arrival, late arrival, amendment, shifting etc) are entirely avoidable if everyone in the chain follows the process that they need to follow.
What are port charges?
Port charges, as the name suggests are a set of charges levied by the port or terminal which the container passes through.In terms of container shipments, port charges may include but not limited to below :
Terminal Handling Charge (THC)
Is quite simply the charge levied by the port for the loading and discharging of a container from the ship.. THC differs from port to port, terminal to terminal around the world and is charged both by the load port and discharge port.If the cargo is transhipped anywhere along the route, then the transhipment port also charges this THC but that is paid by the shipping line directly to the port and this quantum is usually included in the ocean freight charged by the line.
Early Arrival Charge
A charge levied by some of the ports/terminals for a container that arrives in the terminal BEFORE the stacks into which it is to be taken has been opened.. Early arrival can happen due to various reasons like a container missed the stacks for the previous vessel narrowly, but since the container is packed, it needs to be taken to the port, The acceptance of containers prior to the stacks/gate open is at the discretion of the Port/Terminal Operator and on the circumstances surrounding the operation of the vessels.
Late Arrival Charge
A late arrival charge is a charge levied by the port for a container that arrives in the terminal AFTER the stacks into which it is to be taken has been closed.. This could be due to delays in documentation, packing delays, inspection, trucking delays and many other situations.The acceptance of containers after the closing of stacks/gate is at the discretion of the Port/Terminal Operator and on the circumstances surrounding the operation of the vessels and if the containers can be accepted without disrupting the schedule of the vessel and ports.
Stuffing/Destuffing of Containers
Some ports/terminals allow the stuffing (packing)/de-stuffing (unpacking) of the containers within the port area and charge customers based on the port tariff.This activity may happen at ports that provide CFS services and allow containers to be packed or unpacked in the port or due to some mistakes when the cargo was originally packed – say incompatible hazardous cargoes packed together.Depending on the port/terminal/country, the port charges may be charged directly to the customer (importer or exporter) or to the shipping line, who in turn will charge this to the customer.
Of course, this is not the full list of port charges but these charges have been mentioned as it relates to the subject under discussion,Demurrage and DetentionWhile some of these port charges may be unavoidable, demurrage and detention charges on the other hand are avoidable charges, but in a lot of cases due to mishandling, miscommunication, misunderstandings and not following the proper protocols, these charges occur..When they do occur, these charges may create quite a financial impact on the whole business and sometimes these costs could be so prohibitive that some customers abandon their cargoes at the destination due to these costs.
Although the most common market practice is to combine demurrage and detention, there are several cases where these are charged separately, and therefore it is important to know the difference between demurrage and detention.
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Warehousing and Distribution
Article | July 11, 2023
Risk management has been a problem for as long as supply chains have existed. Because of the interdependence of all its connections, even a minor issue in one isolated region has the potential to jeopardize a whole global supply chain. As a result, when major global trends and events occur, the potential for widespread supply chain disruption is enormous.
Global supply chain risks and market disruptions have reached an all-time high. The most notable of them is the COVID-19 pandemic. In a 2020 survey, the Institute for Supply Management discovered that 95% of companies faced operational issues due to the pandemic. As a result, business executives all around the globe believe that if they want to be more resilient and competitive in the present market, they need to modernize and make significant changes to their supply chain strategy.
Other recent factors that have had a significant impact on traditional supply chain practices include the fast pace of change in consumer behaviors and a pretty unstable trade and political environment.
In the last ten years, e-commerce spending has tripled, and internet shopping had increased by 149% in 2020 compared to the previous year. With the growth of e-commerce, there has been a rise in customer demand for faster delivery and more personalized shopping experiences. The Amazon Effect refers to the growing expectation for same-day delivery and its effect on businesses and logistical networks. To be resilient enough to react to these rising demands, supply chain managers have had to make fast and significant modifications to their logistics and warehousing networks, as well as discover new ways to collaborate with third-party fulfillment partners.
Even before the impact of COVID-19, American businesses were attempting to reduce their dependence on foreign manufacturers and suppliers. Foreign tariffs and trade policies had become more unpredictable by 2019, and businesses were seeking technological solutions to make the supply chains more self-sufficient and resilient. As a result, integrating digital transformation and Industry 4.0 technology into supply chain operations is quickly becoming a top concern for global business leaders.
How does Supply Chain Resilience Work?
A flexible contingency plan and the ability to react swiftly to operational disruptions are important characteristics of effective supply chain management. However, to be truly resilient, a supply chain must be able to predict and anticipate disruptions and, in many cases, avoid them entirely.
Strategic supply chain planning is an important step in achieving resilience because it synchronizes all supply chain components and increases visibility and agility. Supply and demand needs are better understood, and production is synchronized due to supply chain planning. This integrated, forward-thinking approach assists businesses in better anticipating problems, reducing the impact of supply chain disruptions, and improving overall operations.
When a business has the digital systems to analyze and make sense of Big Data, it significantly improves supply chain resilience. Artificial intelligence-enabled systems can curate disparate data sets from across the business and the globe. To discover trends and opportunities, news, competitor activity, sales reports, and even customer feedback can be examined together. The system's connected devices are constantly monitored, providing real-time insights about where and how processes can be automated and improved. For instance, AI, machine learning, and modern databases acquire and handle Big Data and analyze and learn from it in an almost infinite number of ways. This enables intelligent automation across the network and provides supply chain managers with the real-time insights they require to respond quickly to disruption and unexpected events.
Supply chain managers have traditionally sought to limit the number of partners and suppliers in their network to minimize operational and logistical complexity. This approach is based on the stability of the social, environmental, and political systems. Unexpected disruptions in one region can slow or even stop network operations across the board. Supply chain resilience technologies, such as blockchain, sensors, and advanced analytics, enable supply chain managers to monitor complex partnerships and supplier contracts even in the most remote parts of their network.
Profitability in the supply chain has always been dependent on minimizing excess and keeping inventories as lean as possible. Capacity and inventory buffers are expensive, and supply chain managers have often bet against disruptions to keep prices low. When the pandemic struck, many businesses discovered the real cost of the gamble. Supply chain operations can involve on-demand manufacturing, virtual inventories, and predictive demand forecasting using digital supply chain technologies to remain resilient, even in times of unexpected disruption.
Benefits of a Resilient Supply Chain
Finding a successful balance between supply and demand is a significant issue for any supply chain manager in an increasingly competitive market. Many businesses that have cut costs on diversification, supply chain technology, and other resilience measures have lately discovered the true cost of those choices. However, when businesses engage in diversification, supply chain technologies, and other resilience measures, they can achieve a variety of business benefits, including:
More efficient operations: Better resilience often results in less risk and a greater capacity to invest in innovation and growth. For example, according to a 2020 global business analysis conducted by Bain and Company, businesses that prioritized their investment in supply chain resilience had up to 60% quicker product development cycles and were able to increase production capacity by up to 25%.
Enhanced productivity: Resilient supply chain solutions lead to the overall system increased productivity. According to a McKinsey 2020 survey, supply chain leaders from across the world report increased productivity due to resilient supply chain systems, and 93% of those surveyed plan to prioritize resilient supply chain strategies for investment in the next year.
Risk reduction: Supply chain activities are often the most vulnerable to risk and loss in many businesses. Supply chains, by nature, are geographically distributed and functionally complex. As a result, supply chains are particularly vulnerable to risk. Resilient supply chain technologies minimize risk by providing insight into all network operations and enabling companies to improve and adjust their processes and logistics in real-time.
Technologies for an Agile Supply Chain
Digital transformation and modern supply chain technology provide businesses with the resilience and competitive advantage they need to react swiftly to disruptions and opportunities.
Artificial intelligence (AI): AI-powered supply chain systems can offer deep procedural and operational insights by gathering and analyzing data from many sources. Predictive analytics and Big Data analysis can assist in predicting risk and demand and recommending measures and reactions in the company.
Machine learning: Machine learning enables the discovery of patterns in supply chain data and the identification of these influential factors - all while constantly learning. This enables supply chain managers to react fast with the finest workflows and operational strategies available.
Industrial Internet of Things (IIoT): The IIoT network in a supply chain comprises connected devices and objects with sensors and unique IDs that allow them to transmit and receive digital data. They collect information and communicate with the central system. AI can analyze and understand this data to enable quick decisions and intelligent automation of supply chain operations and procedures.
Additive (3D) printing: Smart factories can quickly reprogram 3D printers to produce specific products on-demand without disrupting regular business operations in the long run. The accessibility of potential virtual inventories enables supply chains to defend themselves against disruption.
Robots and autonomous things: Robots and drones, which are intelligently automated for speed, efficiency, and accuracy, can adapt their operations on the go to meet quickly changing requirements. They also reduce the risk of harm by eliminating overly repetitive or dangerous tasks from human workers.
Modern databases: The resilient supply chain solutions rely on Big Data, advanced analytics, and real-time insights from modern databases. Supply chain technology can be improved to operate faster and most resilient when equipped with a modern ERP system and an in-memory database.
Resilience means more than just surviving a disruption in operations. A fully resilient supply chain and businesses survive hardship and use it to innovate and improve their business. Building a resilient supply chain is very important in this modern era because disruptions like a pandemic, wars, climate change, etc., are occurring a lot these days. A resilient supply chain helps businesses to survive and thrive even during tough times. To read more about ways to boost supply chain performance, click here.
FAQ
What is supply chain resilience?
Supply chain resilience refers to the supply chain's capacity to be prepared for unexpected risk events, react and recover swiftly to potential disruptions, and grow by shifting to a new, more desirable state in order to improve customer service, market share, and financial performance.
How is supply chain resilience measured?
A supply chain's resilience index is calculated by aggregating its company's resilience index. Given that supply chain company's performance influences overall supply chain performance, supply chain resilience should be measured using the companies' resilience index.
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Supply Chain
Article | August 17, 2023
Enhance professional skills and knowledge in supply chain management by attending top industry events. Gain insights from thought leaders, connect with peers, and stay ahead of the competition.
Supply chain and logistics professionals face various challenges in improving supply chain efficiency and overcoming obstacles. The industry is complex and highly competitive, with external forces making it more challenging. Supply chain and logistics conferences help to address these challenges and promote a healthy international supply chain. In addition, the events will offer a comprehensive platform for professionals to understand the latest innovations & technologies and learn about digital transformation within the supply chain. Discover the latest insights, innovations, trends and more at the top 15 supply chain events to be held between May and December in 2023.
1. Swiss Supply Chain & Logistics Conference 2023
May 31- June 1, 2023 | Zurich (Switzerland)
The Swiss Supply Chain & Logistics Conference is a comprehensive platform uniting global stakeholders within the industry. The event focuses on presenting cutting-edge innovations and technologies, addressing industry challenges, and promoting environmentally friendly solutions. By fostering networking opportunities, the conference aims to facilitate business collaborations among participants. Attendees representing various stakeholders in the value network can expect to gain insights into creating agile, resilient, and sustainable supply chains while optimizing logistics operations. Esteemed speakers will discuss critical topics such as supply chain digitization, demand forecasting, and sustainable transportation practices, which directly impact businesses' bottom lines.
2. ASCM Connect 2023: Europe
June 27-28, 2023 | Belgium (Europe)
ASCM is set to host ASCM CONNECT 2023: Europe, a highly anticipated conference in Brussels. The event promises an extensive range of educational sessions covering the latest trends and developments in the supply chain field. Supply chain professionals attending the conference will allow them to connect with peers, gain insights from industry leaders, and explore advancements in the area. In addition, keynote speakers will share their corporate transformation journey, sustainability in the supply chain, resilience while disruptions, and their views on topics related to the digital supply chain. This event offers a platform for networking and knowledge sharing that can positively impact the growth and success of supply chain businesses.
3. Annual European Supply Chain Management Strategies Summit
November 7-8, 2023 | Munich (Germany)
The European Supply Chain Management Strategies Summit is a premier event that provides a unique platform for senior leadership to explore case studies and solutions in the supply chain industry in Europe and globally. This conference focuses on essential methods to enhance supply chain management. Attendees will gain insights into improving logistics and inventory management, implementing and optimizing IoT and new technologies, fostering collaboration and transparency with suppliers, and mitigating key and emerging risks. In addition, the summit offers an opportunity for supply chain businesses to contribute to the conversation and improve management practices.
4. Empack: The Future of Packaging Technology
November 29-30, 2023 | Madrid (Spain)
The upcoming 15th edition of Empack Madrid, scheduled at IFEMA, is focused on the future of packaging technology and promises to offer a transformative experience for professionals in the logistics and packaging sector. This innovation-driven event is a hub for networking, knowledge sharing, and business opportunities. Attendees will learn the latest advancements and updates that will optimize their supply chain operations within a few hours. Empack caters explicitly to designers, packaging managers, marketing professionals, product developers, sustainability advocates, and industrial packaging, labelling, printing, weighing, palletizing, and robotics experts. Additionally, the event features a key session with Jose Luis Gallego, a prominent naturalist, environmental disseminator, and writer, who will share valuable insights.
5. Future Supply Chain
November 28 - 29, 2023 | Torrey Pines (California)
The Logistics & Supply Chain Summit is designed to bring together supply chain and logistics professionals and key industry solution providers. The event provides a platform for engaging in one-to-one business meetings, participating in interactive seminars, and building valuable professional networks with the range of industry experts, including keynote speakers such as Clare Bottle (Chief Executive of UKWA), Richard Lim (Chief Executive Officer of Retail Economics), Jon Brewin (Business Development Manager of AutoStore System), and Jonathan Ogg (Senior Solution Architect of sofco Limited). The seminars and discussions at the summit cover a range of topics, including emerging technologies, innovative logistics solutions, and sustainable supply chain practices.
6. Deutsche Bank's 2023 Transportation Conference
August 15-16, 2023 | New York City (United States)
Deutsche Bank presents the highly anticipated 2023 Transportation Conference, an event that offers market-leading insights into the global transportation industry. The conference caters to logistics industry professionals with a comprehensive program, including one-on-one and group meetings, engaging fireside chats, and intimate small company dinners for networking. Renowned industry experts, including esteemed key speakers, will share their extensive knowledge and expertise on various logistics and transportation topics. Discussions will cover market dynamics, emerging trends, regulatory developments, and lucrative investment opportunities. The conference provides an invaluable platform for supply chain businesses to gain critical market intelligence, establish strategic partnerships, and capitalize on vast opportunities in the industry.
7. International Conference on Transportation and Development (ICTD 2023)
June 14, 2023 | Austin (Texas)
ASCE's Transportation & Development Institute (T&DI) has organized the co-located ICTD 2023 and Pavements 2023 conferences in partnership with TxDOT. The collaboration brings together global leaders in transportation, development, and pavements, offering an exceptional networking and knowledge-sharing platform for supply chain businesses. Professionals and researchers worldwide will convene to explore topics such as transportation strategies, cutting-edge technologies, infrastructure solutions, and pavement best practices. In addition, the influential key speakers, including Marc D. Williams, Carlos Braceras, Marie Dominguez, Butch Eley, Roger M. Millar Jr., Diane Gutierrez-Scaccetti, Lorie Tudor, and Eileen M. Velez Vega, will share industry-related insights and experiences.
8. Supply Chain Risk and Resilience Forum 2023
May 30 - June 1, 2023 | Berlin (Germany)
The Resilient Supply Chain Summit brings together 35+ experts to discuss new strategies and approaches to manage supply chain risks and build resilience in future crises. The conference provides deep-dive assessments of categories, supplier portfolios, and processes to surface potential issues, better understand risk exposure and vulnerabilities across the supply chain, and identify winning strategies for current and future challenges. Join the summit to gain insights from industry experts and improve your supply chain ecosystem.
9. Gartner Supply Chain Symposium/Xpo
June 5-7, 2023 | Barcelona (Spain)
In today's changing world, supply chains have become more crucial than ever, given their ability to navigate disruptions and manage risk while maximizing returns. Supply chain leaders can deliver profitably in times of uncertainty by leveraging their credibility, confidence, and commitment. Gartner Supply Chain Symposium/Xpo 2023 will explore big ideas and provide actionable insights to help supply chain leaders develop agile and resilient strategies, mitigate risk, respond to disruptions, pursue digital initiatives that drive growth, develop talent for the future, and prioritize technology investments.
10. Supply Chain USA 2023
June 13-14, 2023 | Chicago (United States)
Supply chain professionals, mark your calendars for the upcoming event in Chicago, where 900 executives from the supply chain ecosystem will convene to address the pressing need for resilient, customer-centric, ESG-compliant, cost-effective, and data-driven supply chains. The event is an opportunity to exchange insights, innovative solutions and best practices with industry heavyweights, leading technology providers, forward-thinking logistics organizations, Fortune 500 retailers and manufacturers, and government officials. In addition, the event will help the participants understand how to overcome the glaring weaknesses prevalent in fragmented, siloed, inflexible, and inefficient supply chains and emerge with the right strategies for a successful future.
11. 6th Edition Supply Chain Innovation Summit
June 15-16, 2023 | Amsterdam (Netherlands)
Supply chain management is undergoing a digital revolution that renders old fundamentals obsolete. As a result, companies must rethink and redesign their strategies to stay ahead of the new trends. The Supply Chain Digitalization Summit 2023 will provide an in-depth exploration of the latest advances and techniques in supply chain technology and innovation. Experts will cover every modern supply chain management aspect, from planning and strategy to risk management and customer focus. Gain insights from industry leaders that will help in transforming supply chain operations.
12. The Future of Supply Chain 2023
June 21-22, 2023 | Cleveland (Ohio)
The Future of Supply Chain will bring together executives, academics, and experts to share their knowledge, experience, and vision for the future of supply chain management. The event will feature captivating discussions and fast-paced demonstrations of emerging technologies that will shape the industry's future. In addition, attendees will have a chance to explore interactive sponsor kiosks and network with like-minded professionals. This year's conference will feature special topics such as the circular economy, blockchain, and last-mile delivery.
13. Digital Supply Chain Transformation 2023
October 3-4, 2023 | Biltmore (Miami)
The Digital Supply Chain Transformation Assembly is an exclusive gathering of industry experts, thought leaders, and visionaries at the forefront of digital transformation in the supply chain industry. The event provides an opportunity to learn from what the field's experienced and innovative minds share about the experiences for navigating the challenges of the digital era. Through interactive discussions, hands-on workshops, and insightful keynote speeches, attendees will gain practical insights and strategies for transforming their supply chains, improving operational efficiency, and enhancing customer experience.
14. Gartner Supply Chain Planning Summit 2023
November 29-30, 2023 | Phoenix (Arizona)
The Gartner Supply Chain Planning Summit 2023 is the right platform for supply chain planning leaders to learn about new strategies, insights and frameworks to tackle the challenges of network complexity, demand volatility, and supply disruptions. The event allows heads of Supply Chain Planning, S&OP, integrated business planning, demand planning and supply/inventory planning to connect and share their future vision. At the summit, attendees will gain actionable insights and drive resiliency to achieve sustainable business outcomes. Join now and shape the future of supply chain planning.
15. Supply Chain & Logistics Transformation Summit 2023
November 29- December 1, 2023 | Phoenix (Arizona)
The Resilient and Sustainable Supply Chain Summit will bring supply chain and logistics leaders to address the topics and learn from peers and industry experts how to accelerate digital adoption, transform the supply chain with new technologies, and build the leadership, team skills, and capabilities needed for long-term success. This summit will help professionals to stay ahead of the curve in the ever-changing supply chain management landscape. In addition, it will gain valuable insights into the latest trends, strategies and best practices for building resilient and sustainable supply chains that can withstand disruptions and meet the demands of a rapidly-changing world.
Conclusion
Professionals in the supply chain and logistics industry face challenges in improving efficiency and overcoming obstacles due to high competition, making it crucial to stay informed about the latest industry developments and best practices to succeed.
Attending the top supply chain conferences can provide an opportunity to address challenges, learn about the latest innovations & technologies, and maintain adequate supply chain operations. In addition, attending the events and conferences for supply chain opens up better possibilities for supply chain and logistics professionals to network, gain valuable insights, engage in peer-to-peer discussions and access resources.
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