International shipping is responsible for 90% of global trade, and it is an essential part of virtually every organization’s supply chain. The global shipping industry continues to be in flux as the digitalization of the world’s economy and rapidly evolving technology influence how shippers interact with their suppliers, customers, and fellow businesses. As a result, organizations must constantly be evolving and adapting their global shipping strategy to reflect the ever-changing market.
Reputable full-service 3PL providers are the answer for forward-thinking companies that want to keep an efficient supply chain and take advantage of global growth. Still, some business owners struggle to select a suitable carrier. To resolve this problem, this guide details the framework for a successful international shipping strategy that is based on best practices for a modern supply chain.
Introduction to Shipping Companies
A shipping line is responsible for the overall management of the ocean freight supply chain, including the movement of goods by sea. The supply chain begins at the shipper, continues through the ocean freight forwarder, and ends at the final customer. Some of these companies own their ships, while others use ship chartering — a means of renting ships for operations.
Although shipping companies are commonly linked with maritime and inland water transport, many also provide air, rail, and truck transportation. Let’s take, for instance, United Parcel Service Co. (UPS). The internationally recognized shipping company provides sea, air, rail and ground transportation, as well as logistics solutions.
Top-tier shipping carriers handle warehousing, financing, insurance, and international trade compliance, among other business practices. These companies are the backbone of global supply chains and most times become the customers’ single point of contact for all logistics needs. For this reason, they must deliver the best possible service to remain a competitive force in the industry.
The Roles of Shipping Companies in Ensuring a Smooth Supply Chain
Every shipper wants to deliver orders on time and in perfect condition. One of the ways to achieve this goal is to have a clear understanding of the roles that shipping companies play in the supply chain, which isn’t limited to just moving goods across the ocean or through the air. They include:
Supply chain partners are increasingly being digitized and linked with one another via the internet. This means the flow of information and goods can be seamlessly coordinated, allowing shipping companies to provide customers with a streamlined experience. An excellent case in point is the provision for shippers to view all orders, manage inventory, and track shipping data in real-time.
The availability of this information empowers supply chain business partners to make faster decisions, reduce operational costs, and deliver more responsive services.
Another facet of the supply chain worth considering is the inbound process. It represents all operational activities involved in receiving shipments and storing goods. Encapsulated in the logistics are:
- Inventory storage
- Inventory tracking
This inbound process element involves a warehouse management software system. It stores information regarding the quantities and locations of goods. The system ensures adequate inventory control, which in turn helps prevent shortages that could negatively impact the company’s operations.
Inventory tracking is a vital asset to the logistics industry, particularly for a supply chain that focuses on inbound operations. To efficiently manage inventory, business owners should select shipping lines that can implement effective software systems in their shipping processes. This includes keeping an inventory audit trail of all items and tracking the goods in transit.
As opposed to the previously described inbound processes, outbound logistics involves all activities from a supply chain partner, such as a shipper, to a destination of interest. It is a key component of the supply chain because it involves the fulfilment of orders. Elements within this process include:
- Order fulfilment
- Picking and packaging
- Shipping and delivery
Each of these elements and the supply chain as a whole relies on a streamlined, cohesive, and collaborative process to function successfully. Supply chain partners must share and coordinate information to guarantee each step of the process is completed promptly.
How to Choose the Right Shipping Company
Selecting a carrier requires taking a well-rounded approach to logistics. Hence, a shipper should choose a transport provider that combines all the major service components. It should be one that businesses can utilize in the formation of standard operating processes for effective shipment while enhancing customer satisfaction. Factors to consider are:
To become successful, companies need shipping partners that can adapt to current demands and changes expected in the future. A small business may only require one container at a time, while larger enterprises may need an entire fleet of shipping vessels. Hiring a shipping company that can increase or decrease its operational capacity to suit the demand is essential for a reliable long-term partnership.
Maintaining operational excellence in a competitive business climate requires a shipping line that provides high-quality service. Shippers with this goal need to research potential carriers. Shipping companies that possess well-established brands may be better suited for long-term partnerships than those that haven’t been in business long enough to build their brand.
Intuitive Shipping Solutions
A streamlined and efficient shipping process relies on a carrier that offers the right shipping solutions to solve each problem as it arises. Considerations for shipping solutions should include access to digital tools, 24/7 customer service, inventory control, order fulfilment, and many more.
Cost-Effective Shipping Service
The cost of shipping is one of the most important factors in choosing a shipping partner. Companies using carrier services regularly should choose one with reasonable costs and services that fit their needs. This is particularly true for those who operate low-cost structures or who want to keep their budgets low. While it is important to get a fair and competitive rate, a shipping partner must provide the right kind of service and be transparent in its processes.
As shipping lines adopt a technology-driven, data-driven approach to logistics, business owners need to develop a deeper understanding of their roles in the supply chain. This will allow them to choose the right shipping partner to deliver their goods timely and effectively, as well as increase customer satisfaction.