If you work in the supply chain, then you’ll know the importance of working efficiently. Without efficient processes in place, productivity can suffer, employee morale can dip, and ultimately, profitability decreases. Anything that can enhance efficiency should be embraced with open arms, especially in an age when supply chain companies have to contend with more pain points than seemingly ever before.
This is especially true in the distribution field. A host of issues has made it more difficult for supply chain companies to deliver their goods on time and in full. One potential solution is to use a warehouse near the port. Below, we’ll run through some of the many reasons why so many supply chain companies are adopting the port-central model to drive efficiency and boost profitability.
How port-centric warehousing helps
The port-centric approach works because it makes this easier and quicker. To highlight how it works, let’s think about two different scenarios.
In the first scenario, a warehouse is located in the centre of the United Kingdom. When goods arrive at the port, they then have to be transported many miles just to begin the next phase of the distribution process.
Now let’s think about the second scenario. Here, the warehouse is located extremely close to the arrival port. In this scenario, the next phase of the distribution process can happen within a very short time frame after the arrival of the goods at the port, meaning greater competitive advantage with reduced delivery times.
It’s simple. And there are real benefits to using this method.
Reduces costs
First and foremost, using a warehouse close to the port helps to keep costs down. And it does so in a variety of ways. In the most obvious way, it helps to save money on the cost of transporting the goods to the inland warehouse. There’s also a reduction — or, in some cases, a total removal — of the costs of container detention and quay rent. This can all lead to significant savings, especially when multiplied over the course of a year or more.
Simplifies the process
Anything that makes the supply chain easier is valuable. Using a warehouse close to the port does just that. This is essentially a simplified version of an action that leads to the same result. You’ll need to have your goods in a warehouse. If you can do that without taking any more steps than necessary, then all the better. The goods get to where they need to be more quickly, and, at the same time, several risks — such as the uncertainty of buffer stocks and avoiding potentially wasted freight miles due to call-off — are minimised or removedcompletely.
Provides quicker access to goods
Reducing lead time is a key objective for supply chain companies. By using a port-centric warehouse, you’ll be keeping lead time as short as possible for competitive advantage.
Plus, it allows you to check the quantity and quality of arrived items much earlier, too.
Frees up resources
Using a warehouse close to the port doesn’t just save your company time. It also saves resources, too. There’s no need for an employee to make the long drive to your inland distribution centre. Instead, they can work on other value-adding tasks. Plus, driver scarcity means you may not be able to fulfil all your driving needs anyway, resulting in delays and other problems. By reducing your dependency on long-haul drives, you can put your team to better use.
All supply chain companies know the importance of cash flow. By using a warehouse close to the port, you can enjoy the advantages of bonded storage, which will delay the payment of VAT until the product has been released from the warehouse. This can help to put you in greater control of your cash flow, all the while knowing that your goods are safe, secure, and in line with legal requirements.
At a time when supply chain companies are facing more challenges than ever, the port-centric warehousing approach offers a valuable and welcome solution that helps to make the supply chain process more straightforward.It may not solve every problem, but it does certainly offer a bright note that can function as a welcome relief.
Key takeaway’s
- Efficient supply chain processes are crucial for productivity, employee morale, and profitability in the supply chain industry.
- Distribution companies face challenges in delivering goods on time and in full, requiring innovative solutions to enhance efficiency.
- Port-centric warehousing, locating warehouses near arrival ports, offers several advantages for supply chain companies:
- Cost reduction through savings on transportation, container detention, and quay rent.
- Simplified supply chain with faster goods movement and minimized risks like buffer stocks and wasted freight miles.
- Quicker access to goods, shorter lead time, and earlier quality checks.
- Resource optimization, as it frees up resources and reduces dependency on long-haul drives.
- Cash flow advantages with bonded storage, delaying VAT payment until products are released from the warehouse.
- Port-centric warehousing provides a valuable and welcome relief in a challenging supply chain environment, though it may not solve all problems.
Overall, adopting the port-central model can drive efficiency and boost profitability, making it a beneficial strategy for supply chain companies facing increasing pain points.
What’s next?
If you’re looking for a warehouse close to a port, then get in touch with us here at TEPS. We have warehouses conveniently located close to Hull’s busy docks and have the expertise and experience you need to boost your distribution performance. Call us on: 01482 326856.
