Supply Chain Resiliency is Supply Chain Security

Global Trade Magazine recently published an article highlighting the possibility of a port workers strike at the East and Gulf Coast ports. Those familiar with O’Meara and Associates will recall our previous discussion on the costs associated with delays due to port shutdowns, particularly in LA/LB.

Experienced logistics and supply chain management (SCM) professionals are likely to have contingency plans ready to reroute traffic, both inbound and outbound, to maintain the flow of goods.  Supply chain security programs such as the US’ CTPAT and the various Authorized Economic Operator plans (in the EU, etc.), based on the World Customs Organization’s AEO Compendium require such contingency plans. Here’s how to handle this situation:

For outbound traffic, collaborate with your freight forwarder to anticipate the use of alternative export ports. This strategy may increase pre-carriage costs (the trucking expenses to the outbound port). It’s a business decision whether to transfer these additional costs to the customer. The increased expenses should be weighed against the savings from avoiding delays.

For inbound traffic, the situation is more complex. The decision to bypass a specific U.S. port must be made before the goods arrive at the foreign port of shipment, ensuring the correct booking. Thus, the decision-making process must be moved further upstream. Again, costs will vary, and the savings from delay avoidance should be factored into the overall equation.
O’Meara and Associates can assist with these strategies and more. Follow our LinkedIn page and YouTube channel for further insights into global trade policy and strategy.