The COVID-19 pandemic put a spotlight on the importance of global supply chains. Many Canadians, most of whom had never thought about the details of how a shipment made its way from origin to destination suddenly found themselves acutely aware of how critical efficient, responsive supply chains are to the national economy.
Now there’s a renewed focus on strengthening supply chains and there are new players helping to manage the end-to-end movement of cargo internationally.
Or rather – there are established players in the supply chain that are making major moves to offer services far beyond what goes on in sight of a harbour.
Who are these players?
Port operators.
While Canadian port operators are mostly known for their work loading and unloading freight at west coast terminals around British Columbia and at east coast hubs like Saint John, New Brunswick, some are expanding their ambition with end-to-end global logistics services.
Buyers and sellers of international freight have traditionally needed to work with multiple stakeholders in the supply chain. That could mean four or five separate companies to deal with – or more. But with ports and other providers expanding to full-service offerings, customers can now deal with a single provider for every stage of their shipment’s lifecycle.
Ports and terminal operators are in a uniquely strong position to expand into end-to-end service offerings because they are perhaps the most critical transition points in the global supply chain. Ports control the access of ships to land and road/rail-originated cargo to ships. Ports can prioritize and expedite cargo. Or they can slow it down. Cargo can move to ports via truck or rail or both, but it must go through a port.
All this gives ports enormous influence on the overall efficiency of supply chains.
But not every port operator around the world is well-suited to offering full-service logistics solutions. In order to do that, ports must have:
1) Existing strategically located port assets in the global supply chain
2) Massive capital to make the necessary end-to-end investments
3) A willingness to invest in innovation once they’ve expanded their global footprint
DP World, traditionally known as a port operator, hasn’t just expanded its offering – it has completely changed its business model over the last few years.
DP World is now a full end-to-end logistics provider. In 2021, the company made an $890 million acquisition of South Africa’s Imperial Logistics and a $1.2 billion acquisition of Syncreon Holdings, which provides storage and distribution solutions. As a result, DP World, and its Canadian arm – DP World Canada – can now offer customers true end-to-end logistics services, including to emerging global markets like Africa.
“There are enormous benefits to choosing a logistics provider with an end-to-end offering,” said Robert Parker, Director of Logistics at DP World Canada. “Importers or exporters that have been frustrated with the speed, costs, or hassles of dealing with multiple supply chain stakeholders just to move a single container from A to B will find end-to-end offerings like ours at DP World Canada a breath of fresh air. It’s simpler, more efficient, and more reliable.”
What are the benefits of end-to-end offerings for importers and exporters?
There are benefits for buyers and sellers of all sizes.
But for customers with complex, high-value supply chains – like multi-million-dollar containers of computers or automobiles – the benefits can be outsized, including:
· A streamlined point-of-contact. In the past, if a receiver had an issue on an incoming international shipment, they might find themselves needing to talk to one or more trucking companies, the originating exporter, the port, a steamship company, and any number of other contacts in the supply chain. In an end-to-end offering, that same receiver only needs to speak with a single organization, which offers full line-of-sight to a shipment from start to finish. Some operators (like DP World) now offer up-to-the-minute tracking systems that identify the location of cargo anywhere on its global journey.
· Increased speed. Every origin-destination pairing is different but end-to-end providers can move shipments anywhere from 10-25% faster than cargo moved through traditional multi-provider supply chains. But it’s not just about the speed of the shipment. A shorter delivery time also lowers the holding cost of the product and leads to faster sales and faster returns-on-investment.
· Reduced costs. Cost savings will vary by shipment and industry and route but with scale, like the container of computers noted above, even marginal cost savings can compound over time and make a material impact on the bottom line. It’s also worth noting that these savings may also be passed along to end-consumers. A more cost-effective supply chain benefits everyone.
· Improved reliability.
Supply Chain Directors want confidence that their flow of goods is reliable and predictable. An organization providing end-to-end services has an enhanced ability to deliver those things because they either own and control the supply chain infrastructure or they can carefully select all their delivery partners. Or both.
· Innovation. Controlling the full end-to-end cargo opens up enormous innovation opportunities. For example, DP World’s partnership with Virgin Hyperloop – DP World Cargospeed – will create the ability to take containers off a ship and then prioritize the transport of time-sensitive, high priority cargo (like medical supplies or fresh food) underwater – all at the speed of flight and cost of trucking.
End-to-end providers also have a greater ability to limit the overall carbon footprint of the supply chain
Limiting GHG emissions and driving sustainability throughout the supply chain is an increasingly important concern for all stakeholders, including importers and exporters. They face pressure from all angles: customers, employees, shareholders, governments.
From a pure efficiency point-of-view, if an organization with a single vision is guiding all decisions about suppliers and contractors, including the fuels and commitments they’re making to reduce their carbon footprints, they can not only deliver better service, but they can also deliver it more sustainably.
For example, they can strategically source and prioritize trucking firms that are using biofuels or converting their fleet to hybrid or electric vehicles.
More control means lower GHG emissions.
Customers want simplicity, transparency, and predictability: end-to-end logistics delivers it all
Ultimately, buyers and sellers, importers, and exporters; they all live in a world that is increasingly trending towards simple, transparent service offerings.
That’s going to be the standard.
Global supply chain logistics providers will have to deliver their services in a way that meets those expectations. That’s why it makes so much sense to see port operators like DP World Canada expanding to be a full supply chain provider.
“We are entering a new age of global logistics where end-to-end providers will be able to deliver value to buyers and sellers that match anything they might find in their day-to-day life,” says Parker. “This is what customers want. And we’re working hard to provide it to them.”
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