What Can Warehouses Now Do to Minimize Suez Canal Damage

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What Can Warehouses Now Do to Minimize Suez Canal Damage
<a href="https://pixabay.com/users/12019/">12019</a> / Pixabay

The Suez Canal is moving again but another bottleneck in the supply chain remains, this one in Southern California. According to media reports, 24 container ships – with a combined maximum carrying capacity nearly 10 times that of the Suez Canal ship – were anchored off the coast waiting for space at the ports of Los Angeles and Long Beach holding up millions worth of cargo.

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What Can Warehouse Operators Do To Minimize Suez Canal Bottleneck?

Multi-billion-dollar analytics systems do a great job of helping warehouses analyze historical data, but unfortunately this may not provide the necessary visibility in helping the warehouse see where it needs to make actionable pivots.

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Enhanced visibility technology into warehouse, yard management and labor resources is yielding both time and cost savings, enabling real-time access to the data to determine which trailers have been sitting and for how long. Loads incurring detention charges can be prioritized. Further, by knowing which trailers will be arriving with products that need immediate unloading to fill an order, tasks can be prioritized and assigned within the distribution center to improve customer fulfillment.

Simply put, analytics may not solve the supply chain challenge, but better visibility that can help warehouses make actionable pivots will be the saving grace.

Additional Background:

The giant container ship that blocked the Suez Canal for six days was freed Monday, but another bottleneck in the supply chain remains, this one in Southern California.

On Monday morning, 24 container ships - with a combined maximum carrying capacity nearly 10 times that of the newly freed ship - were anchored off the coast waiting for space at the ports of Los Angeles and Long Beach, according to the Marine Exchange of Southern California, which keeps tabs on vessels and directs ship traffic.

Once something has left the warehouse, it’s too late. If you think about things like medication and F&B, these items depend on on-time delivery not just for the companies but for their consumers, as well. If companies don’t have status as ‘close to expiration’ and they send product out of the warehouse, that product could expire waiting in the jam that’s continuing to occur at the Suez Canal (even once the accident was cleared). If you have visibility into your inventory and the ability to make cross-network status changes, you can ensure that the right products are going to the right places and that your at-risk product isn’t left in limbo.

Additionally, the backup of ships at the canal will cause backup along the entire supply chain. This will impact the warehouse’s ability to prioritize shipments as its down-stream chain is strained, optimize locations in the warehouse for a new backup of product in the warehouse, and ensure that the teams on the floor are as efficient as possible to reduce even further disruption.

The entire supply chain will need to work from the warehouse-out in order to right this blockage, not just the ships getting through the canal.

Article by Alex Wakefield, CEO of Longbow Advantage

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Jacob Wolinsky is the founder of ValueWalk.com, a popular value investing and hedge fund focused investment website. Jacob worked as an equity analyst first at a micro-cap focused private equity firm, followed by a stint at a smid cap focused research shop. Jacob lives with his wife and four kids in Passaic NJ. - Email: jacob(at)valuewalk.com - Twitter username: JacobWolinsky - Full Disclosure: I do not purchase any equities anymore to avoid even the appearance of a conflict of interest and because at times I may receive grey areas of insider information. I have a few existing holdings from years ago, but I have sold off most of the equities and now only purchase mutual funds and some ETFs. I also own a few grams of Gold and Silver

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