Tactical Decisions Needed: Charter Services, Outsourcing, or In-House Operations?

In the face of the ongoing disruptions caused by the Coronavirus pandemic, companies are rethinking their logistics strategies to ensure supply chain continuity.

One such tactical action being considered as a long-term strategy is chartering vessels. This option, predominantly for large companies, has left smaller companies dependent on logistics entities. However, more companies are taking matters into their own hands and chartering their own ocean-going vessels. Companies like Coca-Cola, Costco, Walmart, Home Depot, Ikea, and Target are among those that have already embarked on this path.

Amazon, before the pandemic, had already recognized the strategic importance of logistics and developed their own in-house logistics capability. This move was aimed at reducing reliance on third-party logistics companies. Amazon has not only chartered private cargo ships but has also expanded their logistics fleet with the purchase of their own planes, named Amazon Air.

The need to ensure supply chain continuity is unrelenting, and companies are exploring various solutions. For instance, Amazon Logistics is currently shipping more parcels than FedEx and is nearly at the shipping levels of UPS. Companies are also buying shipping containers, which are in short supply, to transport their goods.

Given the loading/unloading capacity constraints at major ports, companies are routing ships to less congested ports. Smaller companies should consider geographic diversification of their sourcing solutions to give them more logistics options.

Another strategy being adopted by smaller companies is partnering with others through industry associations or consortia to secure controlled charter services. This collaborative approach can help these companies leverage economies of scale and reduce costs.

The threat of supply breakdowns remains, but companies are responding proactively. They are making strategic, targeted, logistics in-sourcing more cost-effective and are exploring various options to ensure the survival of their businesses. Logistics, more than ever before, is a strategic consideration for businesses, as the ability to ship or receive goods is crucial for their survival.

However, it's worth noting that there are no available search results regarding which companies have independently chartered ships in recent months to transport their production goods. As the landscape of logistics continues to evolve, it will be interesting to see how companies adapt and innovate to overcome these challenges.

Amazon, in addition to its own logistics services, is positioning itself to offer these services to other parties. This move could potentially revolutionize the logistics industry, making it more accessible and affordable for a wider range of companies.

In conclusion, the pandemic has underscored the importance of logistics and the need for companies to take control of their supply chains. Whether through chartering vessels, buying containers, or partnering with others, companies are finding ways to ensure their supply chain continuity and secure their future.

Tactical Decisions Needed: Charter Services, Outsourcing, or In-House Operations?