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Model „Just-in-time“ endangered?

Massive traffic jam in the Suez Canal… learn here which problems are still persistent in cargo trade and how HSM can support you.

 

Global freight transport has been shaking from several quakes when the world stopped breathing due to the container ship “Ever Given” blocking the Suez Canal most recently.

Not only that the ship was stuck but also it took several days to set it free. The queue of ships waiting was getting longer and longer – the consequence: a super traffic jam. Even if the traffic will come to normal soon, we will still be affected by the impacts in many ways. But the blockade was only the icing of the cake as corona and trade restrictions already have a great impact on freight trade.


Global supply chains under pressure

Long distances are common in all sectors. With a share of 90% sea freight is the most important way of transport in cross-boarder commodity trading. Production in China, subsequent processing in Germany and finally delivery to the customer in the USA – this value chain is daily business. Any delay of the customer’s freight leads to a nerve-wracking and expensive situation. Just-in-time delivery is an important factor that has become unstable due to “Ever Given” blocking the Suez Canal. Furthermore, the current pandemic has massively affected the global economy. This leads to extreme bottlenecks in European sea-ports – also due to missing workers there. Therefore, freight charges are still rising steeply due to increasing demand and the resulting container shortage.

The question now is: are there any alternatives? Procurement in regional markets would be an idea. “Local sourcing” has many advantages like a higher supply security due to shorter supply chains, flexibility and geographical proximity but also it supports local development thanks to safe income and jobs.

But – as good as it sounds – it is simply not possible in our sector. The supply chain like described above – from China, to Germany to the USA – is more common in our business.

Indepence from global supply chains

Our aim at HSM is to make our customers more independent from international supply chains and secure just-in-time deliveries even during an interruption of freight traffic. As your all-around-carefree partner we do not only work with producers all over the world but also – and this is our great advantage – specifically with European mills. Thanks to our extensive delivery programme and long-lasting contact to European partners we can realize flexible supply of various high-performance materials, steel or metals according to all required norms or in any dimension, we have even quick access to rare special grades.

Or have you already tried consignation stock?

We are also very experienced concerning logistics. Even with small impediments like a super traffic jam in the Suez Canal we are able to react quickly and realize confirmed lead times. Furthermore, we are offering any kind of stocking like consignation stocks.

The advantage is obvious: the implementation of a consignation stock at or close to your premises leads to supply security thanks to short distances and quick access any time.

However, there will be more advantages:

  • We procure the material and you will not receive an invoice before call-off of material. This reduces your current assets and you can use the consignation stock as financing funds
  • High availability of your material combined with a small inventory
  • Reduce your administration by fix call off intervals (weekly, monthly, …) due to a simplified settlement
  • Depending on the kind of consignation stock you can also save time and personnel resources. Your incoming goods inspection is simplified as material is already quality tested and always available on your consignation stock.

Overview of all the advantages and more information

While using a consignation stock you don’t only overcome problems in freight trade but it is also an advantage if your demand is varying a lot. Consignation stock means always having enough material of indispensable goods.

Does that sound interesting for you?

Be one step ahead during the next crisis and get in touch with your contact at HSM.

 

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