freight-management-risk-mitigation

What is Freight Management Risk Mitigation

Freight Management Risk Mitigation is establishing plans to reduce any potential risks that may arise with managing your freight. It is concerned with ensuring that your freight still gets shipped regardless of any hurdles that may crop up from time to time.

Freight Management Risk Mitigation Issues

These potential issues include:

  • Capacity Crunch – not enough truck and / or drivers to ensure expectations around delivery timeframes are met, which can lead to increased freight costs
  • Transporatation Strikes – Industry & Union related, or as related to an individual supplier (carrier)
  • Cyber Security / IT Issues – related to hacks or server problems, which stop either the carrier or the shipper from processing orders
  • Government Legislation – such as with COVID restrictions, leading to delays in warehousing order processing or Border crossings, or inability to visit stores in person during lockdowns
  • Warehouse / Depot Issues – such as a Dangerous Goods (DG) Spillage
  • Natural Disasters – such as flooded roads stopping trucks from accessing usual routes or entering flooded towns

The above-mentioned hurldes to freight delivery have increased in recent years, most notably since the Pandemic. In a Post Covid world, and with an environment where cyber attack, DG incidents and increasing weather evens can cause critical shutdowns for key players in the supply chain, the ability to ensure that you move away from 100% reliance on one carrier, (diversify), becomes more and more compelling.

Having at least two carriers for the same type of service your freight profile requires enables you to switch at a moment’s notice from one carrier to another and is therefore key to mitigating strategic risk and to maintaining consistent customer service levels.

Recent Freight Management Risk Occurences

Just in the last year we’ve faced:

  • Cyber-attacks against the Toll Group
  • A Peak Season 2020 unline any other, because of the increased online shopping (due to Government restrictions)
  • Supply Chain issues with Importing freight, particularly from China: the manufacturing centre of the world and where Covid first hit
  • The Evergreen shipping debacle in the Suez Canal

More recently we’ve experienced continuing wharf & container supply issues for importing our goods, and continued delays shipping around Australia, as if Peak Season never ended.

In the last few weeks, TNT shut down their Sydney depot and Australia Post stopped pickups across, Victoria, ACT, and New South Wales in an attempt to catch up on a massive backlog of deliveries.

All of these issues speak to the critical need to have a freight risk mitigation plan in place.

Freight Management Risk Mitigation Strategies

So, how do you go about implementing a Freight Management Risk Mitigation plan?

You need to have the right freight technology, the industry knowledge and operational strategies that provide you with options for carrier selection; options for successful delivery of goods to your customers / end receivers. Accessing the solutions of a freight consultancy such as ours can assist with implementing a freight risk mitigation plan. We have the systems, the expertise, the carrier relations to quickly assist our customers to pivot or to add a new carrier.

The best way to go about this is to plan in advance. That means conducting a freight review to get the right mix of carriers and service to distribute your freight.  When you add in a multi carrier Transport Management System (TMS) for managing your freight orders you can quickly pivot to ship all your freight via one of your main carriers, if the other is unable to for whatever reason.

For example, with the above-mentioned issue with the TNT Sydney depot shutdown, for one of our customers, who uses our TMS, we could quickly transfer their freight from TNT to a similar 1st tier road carrier without their having to miss a beat; without their customers noticing any delay in receiving their orders.

ECommerce Shipping Risk Management Strategies

For those who are wanting to set up online shopping, drop shipping, or click & collect deliveries we have the TMS & Ecom systems to assist with that as well, and therefore we enable logistics businesses to retain (and grow) their customers during lockdowns and restrictions, and the general hesitancy to shop in person.

In fact, many consumers and B2B customers have grown to prefer the ease of online shopping so long as freight costing information and delivery timeframe options and tracking of shipments is automated for them. We have the freight technology and the experience with residential, last mile carrier solutions to enable that for our customers as well.

If you would like to learn more about the solutions we have to enhance your freight risk mitigation strategies, please contact us to set up a consultation meeting.

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