Your Supply Chain Is Probably Lying to You

The most dangerous KPI isn't the one that's wrong. It's the one that's technically correct but tells you the wrong story.

We all love KPIs.

On-time delivery: 96%.
Forecast accuracy: 91%.
Inventory: down 12%.
Manufacturing efficiency: 94%.

Sounds like we're doing a pretty good job, right?

Well… maybe.

One of the things I've learned working with supply chains is that a KPI can be perfectly correct and still give you the wrong answer.

Imagine a company with a 95% On-Time Delivery rate.

At first glance, that's great.

But then you ask a few more questions:

- On time according to the original customer request date, or the date we changed it to?

- How many orders were delivered on time because the customer accepted a later date?

- How many required an expensive expedited shipment to make the deadline?

- And how many orders were already late before someone realized there was a problem?

Suddenly, that 95% doesn't look quite as impressive.

The same happens with lead time.

Suppose we reduce our average end-to-end lead time from 30 days to 25.

Success!

But what if the average improved because a few large orders moved much faster, while smaller orders became significantly more unpredictable?

The average tells us we improved.

The customer experience might tell us something completely different.

And that's the problem with averages and isolated KPIs.

They measure what happened. They don't necessarily explain why it happened.

This is why I think the next step in supply chain performance management isn't simply adding more KPIs.

It's connecting the KPIs and understanding the story behind them.

Instead of asking “What's our lead time?” we should ask “Where is the time actually being spent?”, is it manufacturing? Transportation? Waiting for an approval? Quality release? Planning? Customs? Or simply waiting for someone to make a decision?

And instead of asking “Are we on time?” maybe we should ask “What did it take to be on time?”

Because there's a huge difference between delivering on time through a stable, predictable process and delivering on time after three escalations, an emergency production slot and an expensive air shipment.

Same KPI. Completely different supply chain.

That's why I believe good supply chain analytics should work a bit like detective work.

The KPI tells you where to look, the process tells you what happened and root-cause analysis tells you what needs to change.

So the next time your dashboard is full of green numbers, don't just celebrate.

Ask a few uncomfortable questions, what is this KPI really telling us? What is it hiding? and perhaps most importantly: Are we measuring performance… or just measuring the symptoms?

Because sometimes the biggest supply chain problem isn't a bad KPI, it's a KPI that makes us believe everything is fine.

Why the "Made in X" Doesn't Tell the Whole Story

Walk into any store, turn over a product, and you'll probably find a small label that reads "Made in Vietnam," "Made in Spain," "Made in China," or another country of origin. Most of us assume that this tells us where the product came from.

In reality, it tells only the final chapter of a much longer story.

Modern supply chains are global ecosystems, where dozens, or even hundreds, of companies across multiple continents collaborate to create a single finished product. The country printed on the label often represents only the location of the final assembly, not where the product's journey truly began.

Take a smartphone as an example.

Before it reaches your pocket, its components may have traveled thousands of kilometers:

• Rare earth minerals extracted in Africa.
• Semiconductor wafers manufactured in Taiwan or South Korea.
• Memory chips produced in Japan.
• Camera modules assembled in another country.
• Display panels sourced from specialized manufacturers elsewhere in Asia.
• Batteries produced by dedicated suppliers.
• Final assembly completed in Vietnam, China, or India.

When the phone finally receives its "Made in..." label, it has already crossed multiple borders and passed through an intricate network of suppliers, manufacturers, logistics providers, ports, warehouses, and distribution centers.

That label captures the final step. not the entire journey. But why It Matters?

Understanding this complexity helps explain why global events can affect products seemingly unrelated to the countries involved.

A disruption at a semiconductor plant, a port strike, a drought affecting raw materials, or new trade regulations can ripple through the entire supply chain. Even if the final assembly takes place in one country, critical components may originate from many others.

This interconnectedness is why supply chain resilience has become a strategic priority for businesses worldwide.

Global supply chains are often viewed through the lens of cost reduction, but they also represent collaboration on an extraordinary scale.

Each participant contributes specialized expertise:

• Raw material producers
• Component manufacturers
• Technology innovators
• Logistics providers
• Quality inspectors
• Distributors
• Retailers

The finished product is the result of thousands of coordinated decisions made across different organizations, cultures, and time zones.

The next time you pick up a coffee machine, a bicycle, or a smartphone, take a moment to look beyond the country printed on the label.

That simple phrase "Made in..." isn't the whole story. It's the final signature on a journey that may have spanned dozens of countries, hundreds of suppliers, and countless logistical operations before arriving in your hands.

In supply chain management, every product tells a global story. The label simply reveals where the last chapter was written.

The New Geography of Supply Chains: Nearshoring, Friendshoring & Resilience

For decades, global supply chains were optimized for one primary goal: cost efficiency.

Companies chased low-cost labor, consolidated suppliers, and stretched production networks across continents. That model delivered scale and savings but it also created fragility.

Recent years have fundamentally changed how organizations think about supply chain geography. Trade tensions, geopolitical conflicts, climate disruptions, pandemics, and transportation bottlenecks have exposed the risks of overly long and concentrated supply chains. As a result, businesses are rewriting the global supply chain map, prioritizing nearshoring, friendshoring, and resilience over pure cost optimization.

From Globalization to Regionalization

The shift we are witnessing is not the end of globalization, but a move toward regionalized supply chains. Instead of relying on a single distant manufacturing hub, companies are spreading operations across multiple regions closer to end markets.

This new approach reduces dependency on any one country or trade lane and allows companies to respond faster to demand changes. Shorter supply lines mean lower transportation risk, reduced lead times, and greater flexibility critical advantages in an era of constant disruption.

Nearshoring: Bringing Production Closer to Home

Nearshoring involves relocating manufacturing or sourcing closer to a company’s primary markets. For North American firms, this often means moving production from Asia to Mexico or other parts of Latin America. In Europe, nearshoring may involve Eastern Europe, Turkey, or North Africa.

The appeal of nearshoring goes beyond geography. Companies benefit from:

• Faster replenishment cycles

• Reduced transportation costs and emissions

• Improved collaboration and quality control

• Lower exposure to port congestion and global shipping volatility

While labor costs may be higher than offshore alternatives, many organizations find that the total cost of ownership including risk, inventory, and responsiveness favors nearshoring in the long run.

Friendshoring: Trust as a Strategic Asset

Friendshoring takes the idea a step further by prioritizing sourcing from countries with strong political, economic, and regulatory alignment. The goal is not just proximity, but trust.

In a world of export controls, sanctions, and sudden policy shifts, companies want suppliers located in jurisdictions where trade relationships are stable and predictable. Friendshoring reduces the risk of supply disruptions caused by geopolitical tensions and helps organizations stay compliant with evolving regulations.

This approach is especially relevant for critical industries such as semiconductors, pharmaceuticals, energy, and defense, where supply continuity and security are essential.

The Cost vs. Resilience Trade-Off

One of the biggest misconceptions is that resilience and cost efficiency are mutually exclusive. In reality, disruptions are expensive. Factory shutdowns, stockouts, expedited freight, and lost customers often cost far more than incremental increases in production expenses.

By redesigning supply networks with resilience in mind, companies can stabilize operations, protect revenue, and improve customer trust even if unit costs rise slightly. Over time, many organizations find that resilience delivers a strong return on investment.

Modern supply chain technology is a key enabler of this shift. Digital twins, scenario modeling, AI-driven risk analytics, and real-time visibility platforms allow companies to test different geographic configurations before making large investments.

These tools help leaders answer questions such as:

• What happens if a key supplier goes offline?

• Which regions offer the best balance of cost, risk, and speed?

• How should inventory be positioned across a multi-regional network?

Data-driven insights make it possible to design smarter, more adaptive supply chains without relying on guesswork.

Looking Ahead, the geography of supply chains is being permanently reshaped. Nearshoring and friendshoring are not short-term reactions they are long-term strategic responses to a more volatile world.

Companies that embrace this shift will be better positioned to navigate uncertainty, meet customer expectations, and compete in the years ahead. Those that cling to overly centralized, cost-only models may find themselves increasingly exposed to disruption.

Digital twin: Conecting the digital and real world

The term “digital twin” might sound futuristic, but it’s quickly becoming a practical tool reshaping how operations and supply chains work today.

In simple terms, a digital twin is a virtual replica of a real-world object, system, or process; anything from a single machine to an entire manufacturing network.

Imagine your factory, warehouse, or supply chain recreated in a digital space. This virtual version mirrors what’s happening in real time, thanks to data flowing in from sensors, IoT devices, and business systems. Every movement, transaction, and temperature change can be captured and reflected in the digital twin.

So, what’s the point? The value lies in simulation and insight. A digital twin allows you to experiment and test scenarios without affecting actual operations. You can explore what might happen if a supplier goes offline, if demand spikes unexpectedly, or if a new route could shorten delivery times. Instead of reacting to problems after they occur, you can anticipate and plan for them.

This technology helps organizations make smarter, faster decisions. Maintenance can become predictive instead of reactive. Inventory planning can adjust automatically to real-time demand. Logistics teams can visualize the entire flow of goods and identify inefficiencies before they cause delays.

Ultimately, a digital twin acts as your operation’s virtual brain, continuously learning, adapting, and optimizing. It bridges the gap between the physical and digital worlds, giving supply chain leaders greater visibility, control, and confidence in every decision.

The future of operations isn’t just physical anymore. It’s mirrored, modeled, and improved through digital twins.

 

Understanding the 7 Types of Logistics

In today’s fast-paced and interconnected world, logistics is the backbone of successful supply chain management. But logistics is far more than just trucks and warehouses, it’s a complex network of movements that support everything from manufacturing and retail to military operations and live events.

Let’s break down the 7 main types of logistics, each with its own purpose and value in the supply chain:

1. Inbound Logistics: This refers to the movement of raw materials and components from suppliers to a business. It plays a crucial role in manufacturing. For example, a car manufacturer receiving engines, tires, and electronics depends heavily on a well-organized inbound logistics system.

2. Outbound Logistics: Once products are finished, outbound logistics ensures they reach the customer. It includes warehousing, packaging, and transportation. Think of Amazon shipping products from its fulfillment centers to your doorstep.

3. Reverse Logistics: This process moves goods back from customers to the business. It includes returns, recycling, repairs, or disposal. E-commerce companies rely on reverse logistics to handle product returns efficiently.

4. Third-Party Logistics (3PL): Many companies outsource logistics operations like transportation, warehousing, and distribution to service providers. DHL or FedEx, for instance, manage end-to-end supply chains for other businesses, allowing them to focus on their core operations.

5. Fourth-Party Logistics (4PL): This is a step above 3PL. A 4PL provider acts as a strategic partner, overseeing and integrating multiple 3PL services for a manufacturer. It offers a big-picture approach to managing the entire logistics ecosystem.

6. Military Logistics: Beyond commercial use, logistics is critical in military operations. It involves planning, movement, and supply of troops, equipment, and ammunition. Effective military logistics can mean the difference between mission success and failure.

7. Event Logistics: Ever wondered how entire music festivals or sports events come together? Event logistics handles the planning and transportation of staging, lighting, and equipment. It ensures everything is in the right place at the right time, from concerts to exhibitions.

Logistics isn’t one-size-fits-all. Each type serves a unique function in supporting business, operations, or events. Understanding these logistics types helps supply chain professionals optimize efficiency, reduce costs, and improve customer satisfaction.

Understanding the 7 Main Types of Shipping Containers in Global Supply Chains

In today’s interconnected world, shipping containers are the unsung heroes of global trade.

From electronics to fresh produce, nearly every product we use has spent time inside one of these versatile metal boxes. But not all containers are created equal, each type is designed for a specific set of cargo requirements.

Here are the seven most commonly used shipment containers and how they serve the diverse needs of modern supply chains.

1. Standard Dry Container (20ft or 40ft):

This is the most widely used container in the world. It’s fully enclosed, weatherproof, and suitable for general cargo.

Think furniture, textiles, machinery, and consumer goods. Most dry containers come in 20-foot and 40-foot lengths and can be stacked and transported easily by ship, truck, or rail.

2. High Cube Container:

Similar to standard containers but with an extra foot of vertical space (usually 9'6" high instead of 8'6"), high cube containers are ideal for lightweight, high-volume goods. They're often used for bulkier cargo like automotive parts, paper products, or large electronics that benefit from the additional headroom.

3. Open Top Container:

Designed for cargo that can’t be loaded through standard doors—like large machinery, construction equipment, or oddly shaped materials, open top containers have a removable roof. They allow for crane loading from above, making them practical for oversized freight.

4. Flat Rack Container:

With collapsible sides and no roof, flat racks are engineered for heavy loads and oversized items such as steel coils, industrial pipes, or vehicles. These containers allow cargo to extend beyond the sides, making them a flexible choice for large or awkward shipments.

5. Refrigerated Container (Reefer):

When it comes to perishable goods like food, pharmaceuticals, or flowers, reefers are essential. These containers are equipped with active temperature control systems that keep cargo at a specific temperature throughout the journey, ensuring quality and compliance with safety standards.

6. Open Side Container:

These containers have side doors that open fully, offering greater accessibility for loading wide or irregularly shaped cargo. They’re often used in retail and manufacturing sectors where easy access to specific items within the container is essential.

7. Tank Container:

Built for transporting liquids, gases, and chemicals, tank containers are cylindrical tanks housed within a steel frame. They are heavily regulated and ideal for food-grade liquids like wine or milk, as well as hazardous materials, ensuring safe and efficient transit.

Choosing the right container isn't just about space, it’s about efficiency, compliance, and cost control. Understanding the functions of each container type can help make better decisions, reduce damage risk, and optimize the flow of goods across borders.

Whether you're moving basic goods or specialized cargo, the right container can be the difference between a smooth shipment and costly delays.

 

Active, passive, and hybrid thermal solutions in cold chain packaging

Choosing the best temperature-controlled packaging solution has grown more difficult and important as there are more packaging alternatives available.

Choosing the best packaging option is a crucial choice that can affect the effectiveness and safety of the items being carried in the field of life sciences logistics.

Cold chain packaging is an essential part of temperature-controlled shipping since it serves as the initial line of defense for perishable goods. 

Active, passive, and hybrid are the three primary categories of cold chain packaging technologies.

Active

These systems use mechanical or electric systems powered by an energy source to keep product temperatures consistent.

These systems are expensive to buy, operate, and maintain and due to their weight, potential need for repair while in route, and availability, they are also more expensive to ship.

Having said this, these are also simple to use and very precise and reliable devices, guaranteeing the temperature is maintained throughout the duration of the journey.

Passive

Insulating materials are used in passive cold chain packaging to shield items from ambient temperatures.

The lower level of accuracy can be an issue with this system, and the risk of product damage exists if a cargo is delayed and the transportation duration exceeds the packaging’s capacity to maintain temperature control, on the flip side this method is substantially simpler and more affordable than refrigerated units.

Hybrid

Hybrid methods use a combination of phase change materials (PCMs) or passive systems (such as water/ice or dry ice) and thermostatic controls or active systems.

It has all the pros of combining both methods, but it also has some of the cons, including the limited availability or the higher cost.

The Largest Courier Companies in the World

Interesting infographic showing by market capitalization the largest courier companies in the world.

It´s no surpirse that the “big three” global couriers, United Parcel Service (UPS), FedEx, and DHL continue to dominate transport services with closer to 70% of market cap.

Having said that, other carriers that operate more regionally have still attained a lot of value, including Japan Post Holdings and China’s S.F. Express and ZTO Express.

The Insane Logistics of Formula 1

If you think Formula 1 races are amazing and the pinnacle of technology applied to sport, you are probably right.

There is no other sport where machinery and components are as crucial to the team success as in Formula 1.

But with twenty-one races across five continents every year, the ten teams that take part on the competition face an astronomical challenge to ensure all what they need to be competitive during the weekend is ready.

Hundreds of pellets and containers travelling around the globe moving enough equipment to ensure the comfort of thousands of workers and the capabilities to assemble and disassemble a racing car every weekend.

We already talked about what happens behind the scenes in the Red Bull air racing competition here, now is time to go even further and watch the logistics miracle that happens in Formula 1!

Enjoy!

The Surprisingly Complex Logistics of Product Returns

Reverse logistics is the movement of goods “upstream” through a supply chain, to return them from the end customer back to a retailer or manufacturer.

Reverse logistics also covers the recycling, repurposing, repairing and resale of products.

There are several types of reverse logistics, for different reasons:

Returns management: This is the most common reverse logistics process: when a customer returns an item to a seller because it is damaged, not as expected, doesn’t fit etc.

Remanufacturing or refurbishment: This involves the repairing and rebuilding of products. Retailers and manufacturers may also recover some parts from a defective product to be used elsewhere.

Unsold goods: When a retailer returns unsold goods to the manufacturer.

Delivery failure: In the instance of a failed delivery (for example, the customer was not in to receive the package), products may be shipped back to the retailer.

Rental equipment: This is when rented or leased products are returned to the manufacturer at the end of a defined term.

Repairs and maintenance: The customer will send the product back to the business to be repaired. 

End of life: These are products that can no longer serve any purpose, so will need to be recycled or disposed of.

The next video shows how reverse logistics works in real life and how complex. When the customer returns the product, a new intricate adventure starts until it reaches its final destination and potentially a new life!

Good Distribution Practices (GDP) & Good Manufacturing Practices (GMP)

 

Good distribution practices (GDP) and good manufacturing practices (GMP) are quality standards and guidelines that have the same objective, to ensure medical device and pharmaceutical products are safe, meet their intended use, and comply with regulations.

GMP focuses on manufacturing processes, while GDP covers distribution activities.

Good manufacturing practices involve consistently producing products that meet quality standards. This requires the implementation of a system where the aim is to minimize risks, from incorrect labelling of products to contamination to incorrect ingredients and everything in between. GMP cover all parts of the production process, from raw materials through to the production of the finished product.

Good distribution practices involve maintaining the quality and integrity of products through all stages of the supply chain. GDP applies to warehousing, storage, and transportation, and it covers everything from storing and transporting products under the right conditions and ensuring product integrity at the correct destination on time.

There are parts of GDP that are unique, so they don’t apply to GMP. Those unique parts of GDP include guidance on transportation covering aspects such as temperature control, vehicle controls, and conducting risk assessments on transport routes.

A deep dive into Cost to Serve

 
Cost to Serve or Cost to Deliver has been a concept that we have explored in the past, you can find the last post we published in this link: The importance of Cost to Serve in Supply Chain.

In this post, we are going to deep dive further on this concept and shed some light around the different components that can impact cost to serve.

First things first, a quick reminder of what is cost to serve; It is the total cost of providing a product or service to a customer including all direct and indirect costs.

Direct costs are those that can be directly traced to the production or delivery of the product or service, while indirect costs are those that are not easily traced to the specific product or service but are still incurred in the process of providing it.

Now onto why understanding your cost to serve is important.

By understanding how much it costs to serve each customer, companies can segment their customers and identify potential areas for cost savings. It can also be used to evaluate different pricing strategies and understand how changes in price may impact overall costs ultimately helping organizations to transform unprofitable customers into profitable ones.

But what is the best way to determine cost to serve, and what are the different elements that make up this metric?

There are several elements and categories that need to be captured to be able to analyse cost to serve and have some meaningful data to work with:

1- Customer: Customer services overheads, order management, customer specific services, presales costs etc

2- Sourcing and manufacturing: Sourcing and procurement, cost of goods, production costs, manufacturing costs etc.

3- Warehousing: Picking packing and storage cost.

4- Delivery/Transportation: Transport, last mile delivery, returns and reverse logistics etc.

Finally, how do we put everything together and calculate cost to serve?

This is the easiest part, providing you have managed to do the hardest part which is to identify all the different costs impacting your operations. Once this information is ready, it´s just a question of subtracting from the customer sale price all these different elements, leaving you with a data point that can be compared across all customers in your organization.

The Carbon Footprint of the Food Supply Chain

 

The quantity of greenhouse gases generated by our food can vary considerably across the global food supply chain.

The difference types of food we could eat can have a significant impact on greenhouse gases emissions on the environment.

Across all foods, the land use and farm stages of the supply chain account for 80% of the emissions.

On the other end of the spectrum is transportation. This stage of the supply chain makes up 10% of total emissions on average.

Worldwide, there are approximately 13.7 billion metric tons of carbon dioxide equivalents (CO2e) emitted through the food supply chain per year. Unsurprisingly, beef and other animal products have considerably greater effect on emissions.

For example, one kilogram (kg) of beef results in 60 kg of GHG emissions, making beef the greatest contributor to greenhouse gases. In contrast, the same weight of apples produces less than one kilogram of greenhouse gases emissions.

When it comes to plant-based foods, chocolate is among the highest GHG emitters. One kilogram of chocolate produces 19 kg of greenhouse gases. On average, emissions from plant-based foods are 10 to 50 times lower than animal-based types.

How Domino's Became The World's Biggest Pizza Chain

Robots, self-driving cars, artificial inteligence...the new frontier for most companies, including fast food.

This is what has taken Dominos to become the biggest pizza chain in the world.

Logistionary: Decoupling inventory

 

Decoupling inventory is the process of setting aside extra parts or raw materials to ensure there aren’t any delays or disruption in the production of finished goods in the event of a supply shortage or machinery breakdown.

In simple terms, decoupling inventory is a type of safety stock, but what it hedges against is slow production and stoppage, not unseen fluctuations in demand, acting as a buffer that allows to continue fulfilling orders even as production issues are happening.

The main benefits of decoupling stock are:

Increased efficiency: Can increase efficiency across production lines and supply chains by allowing each stage of production to work autonomously even in the event of a disruption.

Increased flexibility: Helps mitigate the effects of unforeseen circumstances helping businesses become more agile and ready to respond to unexpected disruptions in the supply chain.

Perform spot maintenance on parts of your manufacturing equipment: Decoupling inventory is particularly advantageous in the event of a facility outage for repairs or machine maintenance.

Provides Protection During Periods of Uncertainty: When manufacturers are unable to obtain sufficient raw materials to finish producing a product, decoupled inventory offers protection to continue production without any delays.

How are Supply Chain issues reshaping fast food value menus

If there has ever been an indicator of inflation, it is fast food value menus. These items or menus have always been the last to reflect changes in prices and have been the last resource indicating whether the economy was at a serious risk.

In the current economic environment, with inflation skyrocketing driven among other things by the several Supply Chain challenges and constraints most of the world are facing, fast food chains have had no other option but to increase the prices on their most iconic menus, leaving customers with the sensation that the old prices are gone for good.

The below video explains some of the challenges fast food chains have been facing and how Supply Chains have been key drivers for the latest price increases.

How China's Covid Shutdowns Keep Hitting Global Supply Chains

It´s no secret China has been keeping a very tight approach on Covid with widespread lockdowns and a tight control on key sectors. The consequences have been felt across the globe.

The video below sheds some light on the impact this approach has had on Supply Chains.  

 

Supply Chain predictions in 2023

 

As we approach the end of the year, it is always worth reviewing the top trends that will be impacting supply chains for the coming year and beyond.

But before we continue with this “tradition” it´s only fair to review how accurate were our predictions for the year 2022.

Not surprisingly the headwinds have continued this year, following from a year 2021 that was considered by many as one of the most challenging in history, aggravated by the COVID pandemic and the continued challenges brought by the acceleration of e-commerce, Brexit or the disruptions in transport.

You can find the post with the predictions for 2022 here.

Overall, and considering the new and more severe challenges that we have faced in 2022, it´s interesting to see that some of the trends we identified last year, became a reality.

Supply Chain issues continued in 2022 and were aggravated by the Ukraine-Russia war, a turn of events that no one was predicting last year.

While logistic prices were up in 2021 driven by shortages on raw materials and transportation, this trend has continued as predicted and has impacted other areas of the Supply Chain even further with inflation skyrocketing and energy prices at an all-time high.

Finally, rightly so, sustainability has been at the forefront of Supply Chains and businesses and has gained prominence as a key indicator for decision making.

Experience should have thought us that a lot can happen in a heartbeat, therefore predicting what 2023 has for us is like a game of roulette, but here we go!

1- Inflation and the risk of recession: Preliminary data in Europe shows inflation running at 10.7% for October; this is the highest ever monthly reading since the euro zone’s formation and something we should expect to continue to a higher or lesser extent in 2023.

Raw materials, transport, energy will all be more expensive than in past years and this will continue impacting Supply Chains and pushing for more efficient and streamlined operations.

2- Globalisation in no more the panacea for business development: With the recent geopolitical challenges we are facing, the focus will be on “localization” VS “globalization” and we shall see assets being transferred from high risk, and generally low cost, areas to more stable and trustworthy locations that are also closer to the end customers.

Investment on fixed assets will be under scrutiny and decisions will not only be made on the basis of lower costs.

3- Sustainability is here to stay: Governments are increasing their demands for companies to prove that they operate ethical businesses and this is becoming not just a “nice to have” and a sign of a company´s values, but a license to operate with significant fines if companies were to fail to comply.

All in all, while predicting what 2023 will bring is an almost impossible exercise, there are certain trends that are likely to gain prominance and we are ready for whatever the future brings! 

Logistionary: Demurrage and detention

Demurrage is a fine to the buyer which is enforced by a freight provider if they do not take their goods away from a port or terminal. Often ports and terminals allow importers to store goods or containers for a number of ‘free’ days, after which charges are applied.

As an example, let’s say a container is being shipped from a supplier in China to a port in Amsterdam. The port normally allows 7 free days of storage, after which they will start charging.

Detention on the other hand is a charge that can be enforced by a transport provider for not returning an empty container to a container yard or port after an agreed time.

As an example, if the buyer of goods takes a container to their factory for 14 days to unpack, and the shipping port allows just 10 days to return the box, then the shipping line will be charged ‘detention’ for 4 days.

The main difference between demurrage fees and detention fees is that demurrage fees are charged when a container is still full and under the control of the shipping line whereas detention charges, on the other hand, occur when the buyer holds on to a container outside the port beyond the specified free time given by the shipping line.

In very simple terms, demurrage charges relate to full containers while detention charges apply to empty containers.

Drone deliveries

Is the future of ecommerce in drone deliveries?

Getting a purchase delivered in minutes is every consumer’s dream, however this is not exactly easy to do.

 

When it comes to drone deliveries, the logistics are complex and intense. The regulatory hurdles are steep and while the technology might already be capable of the task, it will take time to build acceptance and trust with customers to allow drones to fly onto their property.

 

Despite all the obstacles of drone deliveries, the potential benefits to retailers are immense too.

 

Drones are fast and the latest analysis suggest that potentially each trip could occur at a low cost of $1 per shipment.

On top of this, faster shipments could mean higher revenues since 86% of abandoned carts online were the result of expensive shipping costs, according to a study carried out by McKinsey & Company.