Mercado | Insights - Top 5 strategies to cope with imports

Insight: Top 5 strategies to cope with imports

Article | What I learned in Supply Chain

Top 5 strategies to cope with imports

August 17th, 2021
5 minute read

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Every week, Mercado CEO Rob Garrison pens his latest learnings from the supply chain industry as part of an on-going series. Each article aims to share a little insight into what's going on that week, and to help foster discussion amongst industry professionals across levels, geographies, and companies.
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This is the most challenging time I have ever seen in global trade.
Last week I met with five clients. They ranged in size from 1,500-65,000 containers. Although they each had vastly different businesses, their challenges were remarkably similar. There is no silver bullet in the short term. Unfortunately, daily triage will remain the norm at least through the holidays, while importers simply try to “stay afloat” on orders already placed.

In order to escape this pattern, I recommend implementing the following five strategies immediately in order to better cope going forward. There doesn’t appear to be any end in sight according to most of the experts I talk to.

Deploy technology

Managing something as complex as importing with Excel and email was never a good idea, but right now, it’s a terrible idea. An order management platform is essential to solving this. I have one client who is getting up at 3 am every day in order to respond to WeChats before their suppliers go home.

Plan to add two months to your order lead times starting now

Orders placed on Sept. 1 would normally arrive on Jan. 1 (3 months production, 1 month shipping). I recommend expecting a March 1 arrival. Every component of the logistics chain is broken and unpredictable. Each delay compounds the next. Delays in getting a container creates delays in getting a booking. Add port delays on both ends, shutdowns, and congestion to the list of delays. One customer told me they have more than 1,500 containers “stranded” in Asia right now.

“Unfortunately, daily triage will remain the norm at least through the holidays... In order to escape this pattern, I recommend implementing five strategies immediately in order to better cope going forward. There doesn’t appear to be any end in sight according to most of the experts I talk to."
– Rob Garrison, Mercado CEO

Add more product suppliers and logistics suppliers

Even the most historically reliable product suppliers are stretched by all of the logistics and price challenges. The logistics suppliers have unprecedented constraints with carriers which is 5-10’xing their workload. A client shared that they now have to use 10 forwarders vs one to help get space.

Increase inventory

No one wants to hear that obviously, but the alternative is lost sales. Given the shortages everywhere, those who have inventory on hand will fare well. Heavy is the new lean when it comes to inventory. A client we spoke to credited maintaining six months inventory with record sales increases.

Increase prices

Every importer is facing the same unprecedented onslaught of price increases. Raw materials, tariffs, and logistics (transportation and distribution) have all increased dramatically. It’s not going to end soon, and it’s time to bite the bullet and pass the increases along to customers. It’s already happening in many categories impacted by higher supply chain costs, such as produce, gas, or lumber. Customers understand that your costs have skyrocketed, as theirs have as well.

About the author(s)
Mercado Labs | Rob Garrison, CEO & Founder
Rob Garrison
CEO, Mercado Labs
LinkedIn

About the Series

Each week, Mercado CEO Rob Garrison pens his latest learnings from the supply chain industry as part of a series run for his LinkedIn followers. Each article aims to share a little insight into what's going on that week and to help foster discussion amongst industry professionals across levels, geographies, and companies.

You can connect with Rob on LinkedIn by following this link.
Mercado | Bring Order to your Imports
                                               
© Mercado Labs Inc.
From us to you...

Thank you for using Mercado. Our goal is to empower businesses to better navigate the complex world of importing. We know data security is of paramount importance, so we place high standards on ensuring it is safely and respectfully secured. We are committed to following and continuously evolving best practices to support this principle. Your data is yours, and we guard it closely. We do not sell any of your information, and we will always be fully transparent on how we collect and use your data. That's a promise.
Mercado | Bring Order to your Imports
                                               
© Mercado Labs Inc.
From us to you...

Thank you for using Mercado. Our goal is to empower businesses to better navigate the complex world of importing. We know data security is of paramount importance, so we place high standards on ensuring it is safely and respectfully secured. We are committed to following and continuously evolving best practices to support this principle. Your data is yours, and we guard it closely. We do not sell any of your information, and we will always be fully transparent on how we collect and use your data. That's a promise.