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Can warehouses transform port operations?

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The rate at which global trade is expanding is forcing ports and terminals to completely rethink how they operate, and the changing nature of the supply chain means they must also see themselves as more than a hub for goods.

Port Technology International explained in a previous insight how the concept of port-centric logistics (PCL) could transform the maritime industry by turning the port into a hub of collaboration and innovation.

Register your interest for the Port-Centric Logistics webinar here.

Central to these efforts is a reappraisal of the role of warehousing, which will be vital as ports, carriers and businesses meet current and future challenges.

What is the role of warehousing in ports and what are the major trends?

Warehousing is of critical importance to PCL because it allows businesses to store their goods at a port, as opposed to a separate distribution center.

This cuts out unnecessary air miles, emissions and costs, and significantly streamline supply chain processes.

The demands of the global economy have meant warehouses have changed and become increasingly important in the flow of goods.

In 2010 warehouses were largely seen a cost centre, that is an asset which incurs a cost but does not directly benefit a business.

A decade later, they are now utilised as strategic hubs of e-commerce within a multi-tiered supply chain.

This change has been brought about by the same trends that have made PCL such an extensively explored idea. Here are three of the biggest business trends driving its growth.

  • Time-to-delivery

At the broadest level, the biggest driver of growth in the maritime sector is e-commerce and the increasing amount of goods being shipped. This has rapidly increased customer expectations, which in turn has meant time-to-delivery has overtaken price as most important competitive differentiator.

This market phenomenon is often referred to as the ‘Amazon Effect’, due the e-commerce market leader’s emphasis on ensuring goods arrive at customers’ doors in the fastest and most cost-effective manner.

The importance of time-to-delivery, or fulfillment responsiveness as it also called, will become more important, as is routinely shown in industry studies and surveys.

  • Drop shipping

Drop shipping is an increasingly popular supply chain trend which sees retailers transfer orders to manufacturers or wholesalers, who then transfer goods directly to customers.

This allows retailers to increase their profit margins and cut costs, and also increases the burden on warehouses, who now have to directly ship goods themselves.

The concept is growing at such a rate that there are numerous warehouse companies that cater specifically to drop shipping.

  • Automation

For all warehouses to operate efficiently while housing greater amounts of goods, they must invest in automation technology. A particularly popular innovation are Warehouse Management Systems (WMS) or Automated Storage Systems.

These help ensure that warehouse utilise space, consume less energy and run smoothly, and that automation is implemented efficiently.

Warehouse automation includes traditional technology, such as forklift trucks, sorters, conveyors etc, as well as collaborative robotics.

Warehouses are of critical importance to the supply chain, as has been demonstrated by the ‘Amazon Effect’. Providers such as Siemenns Logistics Westfalia and Knapp have adapted to supply solutions that meet export, import and transshipment needs.

This not only shows the nuanced nature of port operations but also that if PCL is going to be realised, the journey will begin in the warehouse.

Upcoming PTI event: Port-Centric Logistics webinar

PTI is now launching a webinar dedicated to the exploration of PCL. The webinar will focus on how ports are reducing supply chain links by bringing warehousing closer to the port land. 

Our webinars are designed to promote a wide range of views on the industry’s most important topics, and we heartily welcome suggestions for contributions – however please note that speaker and sponsorship opportunities are very limited due to high demand.

If you think your company or a contact you know may have something of value to contribute to this session, one of our other webinars, or even a series of sessions, please reach out to our Production Director, Stephanie Morley, directly at smorley@pottechnology.org.

Register your interest for the Port-Centric Logistics webinar here.

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