Sluggish growth means companies are finding innovate ways to cut supply chain costs

12 09 2011

By Allan and Sarah Klinge, Klinge Corporation

At the end of 2010, business leaders around the world agreed that the intermodal industry was showing signs of recovery. Nine months into 2011, this once positive outlook has turned to a feeling of uncertainty.

The Japanese earthquake and tsunami, the fall of consumer confidence worldwide, the decline of the US dollar and the recent US hurricane have only made recovery for the intermodal industry more sluggish. It comes as no surprise that companies around the world are making a concerted effort to cut costs to counter the lackluster performance of the world economy. One such change is that pharmaceutical companies, who traditionally transport cargo by air, are shifting to transport by container ship as an easy way to reduce costs.

Klinge Corp

Merchandise in this industry is among the most expensive retail items in the global marketplace, and as such, accurate temperature control is of the utmost importance. In the past, the challenge with sea freight has been its ability to provide reliable temperature control containers that give ultimate peace of mind when transporting medical products worth hundreds of thousands of dollars. Today, due to technological developments, pharmaceutical brands and manufacturers are able to significantly reduce their costs by transporting goods by container ship rather than expensive air cargo.

Another area where innovation is required to reduce transportation costs is the seafood industry. A recent study, financed by The Danish Food Industry Agency, subsection of The Ministry of Food, Agriculture and Fisheries, indicated that a significant increase in the quality of frozen fish and shellfish can be achieved by blast freezing fish to an ultra-low temperature directly after being caught and then later utilising a controlled thawing process. As taste and colouration of deeply frozen seafood has been shown to match that of fresh seafood, this means that fisheries, food processing companies and logistics providers across the globe are turning to freezing equipment instead of air-shipping fresh seafood. And with CNN reporting that seafood consumption is at an all time high, possible savings for companies transporting products by containership are enormous and represent a large potential market.

Today, refrigerated containers have become so reliable that they are being used by large chemical companies to transport dangerous organic peroxides and self-reactive substances that could actually explode if not maintained at the correct temperature. Similar equipment has also been used to transport millions of dollars of ice core samples from Antarctica, across the equator, and through the Southwestern U.S. to the laboratory for analysis.

Uncertainty in the global economy is forcing companies to embrace innovative cost savings measures. Fortunately, this means more and more businesses worldwide are taking a closer look at alternative methods of transport as a way of moving their goods, which is presenting a number of opportunities for logistics providers. The economic downturn has created a number of issues across the globe, but it has also brought a number of opportunities.

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