The world has made it into a new year, and as we look toward the great unknown, it’s always a good exercise to take a step back, be thankful that we made it through, and also evaluate the current situation so we can plan for the future. The situation that has developed over the last couple of years in our California ports intensified during the holiday season, and for businesses around the world, this has been especially challenging.
Importing and exporting as an industry has undergone some incredible changes in recent years as online ordering has skyrocketed, convenience became a need in everyone’s lives, and political agendas affected the cost of doing business.
Ports of entry experienced incredible backlogs as the hands to help became fewer as evolving health regulations changed the makeup of the workforce.
On November 16th, 2021 there were 89 container vessels drifting or anchored outside of the Los Angeles port. According to the January 6th snapshot, 102 vessels are backlogged at the same port awaiting entry. The amount of cargo ships on their way has also seen an increase and with practically no change in dwell times, the ability for vessel gangs to hit delivery targets becomes increasingly more difficult.
Foreign Trade Zones allow the storage of goods and products for extended periods of time with lowered CBP fees and tariffs. This means a business can hold inventory in an FTZ, manufacture, assemble, destroy, or display this inventory all while paying little, no, or deferred taxes and fees.
FTZ’s, also known as Free Trade Zones, present many advantages to businesses importing and exporting outside of just deferred government costs. In this particular instance an importer could hold their inventory in an FTZ, wait for the most advantageous time, and then execute the plan for this inventory, all while avoiding the maze of cargo ships waiting to head in.
The bottleneck of vessels that are sitting in our waters doesn’t just highlight the need for more efficient FTZ usage, it also highlights the need for more critical application and implementation in the importing/exporting industry.
In an effort to solve this burden, ITC Diligence International Inc. has constructed a 4PL program that has the capability to service the importing and exporting industry with FTZ strategy, inventory analysis, cost evaluations, vendor verification and a plethora of other crucial areas. ITC Diligence International Inc. has seen this industry change drastically over the last 30 years which means they’ve developed tried and true strategies needed to circumvent almost any global or political climate.
Specific supply chain necessities that are handled efficiently by 4PL operators like ITC Diligence International Inc. can include:
- Logistics strategy
- Analytics including transportation spend, analysis, capacity utilization, and carrier performance
- Freight sourcing strategies
- Network analysis and design
- Consultancy Business planning
- Change management
- Project management
- Control tower and network management services, coordinating a wide supplier base across many modes and geographies
- Inventory planning and management Inbound, outbound and reverse logistics management
- And the list grows every day
Business owners have an overwhelming amount on their plates. When looking at the importing and exporting industry, changes happen quickly, suddenly and with no warning, giving already overburdened business owners another ball they need to juggle. ITC Diligence International Inc. aims to alleviate this burden, demonstrate to importers and exporters the benefits of an FTZ, aid in the vessel backlog problem, and bring cohesion and clarity to ports of entry across our country.
The first quarter can set the stage for what the rest of the year will look like. Proper budgeting, inventory management, cost forecasting, and staffing are just a few areas that must be addressed early on in the year. All these reasons and more are why importers and exporters should always rely on the experience, skills, and strategies of 4PL operators like ITC Diligence International Inc. to help guide them through the constantly changing world of commerce.
Contact ITC Diligence International Inc. today to learn more about what strategies they are implementing to directly confront the vessel bottleneck problem in our ports, and how these strategies can positively impact your business today.