Port-centric supply chains the future

The rising cost of transport will see more companies using multimodal port-centric distribution models UK experts say.
Speaking at the recent Warehousing Futures conference in the UK, Baker Rose Consulting Partner David Baker told delegates the rising cost of fuel is increasingly putting the transportation element of the supply chain under scrutiny.
Baker says there is also increasing political pressure to use more efficient transport operations, with the European Union recently stating that freight distribution tasks over 300km should not be carried out using road transportation.
“To reduce transportation costs, the location of hubs and distribution centres (DCs), must taking into account primary and secondary moves and consumer market density,” Baker says.
He says the port-centric model, where DCs are based close to the port in key markets rather than in a centralised location, makes sense for a lot of companies as it often reduces the distance goods needs to travel by road.
“For a truly efficient port-centric model, companies should use a number of distribution hubs feeding all the large population centres, rather than one centrally located hub,” Baker says.
“In addition, companies should consider using hubs that offer multimodal transport options – such as costal shipping and rail transport – as they have in the past.”
Baker says companies that transport large or small volumes and those who co-locate in DCs should give serious consideration to using a port-centric operation that offers multimodal transport options.
Baker adds London Gateway, a development owned by DP World opening in 2013 which combines a new deep-sea container port with Europe’s largest logistics park, and Liverpool’s Port Salford, a new tri-modal inland port facility and distribution park in the UK’s north west, are excellent examples of where this type of operation could be set up.
London Gateway’s Cargo Supply Chain Commercial Manager Peter Ward, also a speaker at the conference agrees.
Ward says ports have an increasingly important role to play in the development of future supply chains.
“Ports have always been viewed as a cost adding node, but facilities offering multimodal, port-centric operations could actual become a value adding node,” he says.
Ward says the role of ports is changing and are more often viewed as an important inventory management location in the end-to-end supply chain.
“Landside transportation costs – particularly road transport –  are now such a large part of overall supply chain costs they need to be fully examined to identify whether there are any efficiencies that can be gained,” Ward says.
“Costs could be reduced through the elimination of unnecessary legs in the supply chain using a port-centric solution.
“This could work for a number of operations, including retail, aftersales, electronic and even operations where re-packaging is required before final distribution.
“To design lasting supply chain operations, companies needed to consider inventory management, multimodal distribution operations and selecting hubs as close as possible to the end buyer,” he says.

Source : http://www.supplychainreview.com.au/news/articleid/81648.aspx

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