Wednesday, August 12, 2015


Call it "ripple"
Call it "domino"
Effect's the same


WEST COAST PORT delays are at least partly to blame for cargo congestion at Chicago's O'Hare International airport, according to a Wall Street Journal report heded Shipping Woes Grow at Chicago’s O’Hare Airport.

"Many companies opted to redirect shipments of goods such as consumer electronics and automotive to avoid delays at the ports of Los Angeles and Long Beach, and some of them have continued using air because of its convenience, industry officials say.," the WSJ reports.

What we now have is "intermodal cargo." Perhaps "multi-modal cargo" would be a better term, but either way, the cargo is being transported via several conveyances - ship, plane, rail, truck.

Delays, snafus, bumps in the night can happen anywhere along the way caused by any number of threats: Accident, Strikes/work actions, Weather, and the always popular, "Ubiquitous Other."

At the airport, the problem is not just on the tarmac; it expands to the roadways leading into the airport and the airport's own road system. Both are crowded and traffic is slowed as trucks try to maneuver other vehicles.

The delay in critical product arrival to the manufacturer or wholesaler should fall under the Enterprise Risk Management (ERM) umbrellas.

How so?

Vendor management.

An organization's purchasing department needs to be alert to any potential delays in a product's delivery date. The Purchasing people need to know where there are historic bottlenecks.

They also need to know - and have the authority to act - when bottlenecks occur and how to avoid them.

This is where the ERM practitioner gets involved.

The practitioner should assure that the Purchasing people are aware of all real or potential bottlenecks and how to maintain awareness. If shipments are via shipping companies or freight forwarders, the Purchasing people need to keep on top of these vendors and be prepared to authorize alternate shipping options.

Obviously senior management must cooperate by authorizing Purchasing personnel - as many as deemed necessary but not less than two people - to make rerouting decisions without delay.

Products destined for a struck or "work to rule" port can be diverted to another port on the ship's route. Likewise, freight can be rerouted to any international airport that can accommodate the freight carrier's aircraft. "International" simply means that the airport includes a U.S. Customs station. (If not O'Hare, perhaps Midway International or Gary (IN) International if the product's destination is in the Chicago area.)

The freight can be transferred to a motor carrier (truck) or train to its final destination.

There ARE ways to avoid bottlenecks and it behooves the ERM practitioner to assure that Purchasing has the tools to be alert to potential and developing bottlenecks - port strikes and slowdowns typically are newsworthy - and to diplomatically convince senior management to authorize Purchasing personnel to do whatever necessary - within established Policies and Procedures - to assure that critical products are delivered in time, if not exactly on time.

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