Supply Chain 101 | Episode 258

Introduction

Welcome back to another episode of the Freight 360 Podcast! In episode 258, we're stepping away from our typical niche focus on freight brokerage to offer a broad overview of the supply chain. Whether you're new to the industry or simply want to deepen your understanding, this episode is perfect for you.

The Basics of the Supply Chain

At the core, the supply chain encompasses all activities associated with the flow and transformation of goods from the initial stage of raw material sourcing to the final delivery to the consumer. Understanding where freight comes from and how it moves through various stages is crucial for anyone involved in logistics and supply chain management.

Origins of Cargo

Cargo primarily originates from two sources: domestic production or international imports. We will focus on international imports in this discussion. Goods are typically transported overseas by freight forwarders who work to arrange the logistics of moving large volumes of cargo that cannot be handled by smaller truck load brokers.

International Imports: Goods sourced from overseas are delivered via cargo ships, typically loaded into containers. These containers arrive at U.S. ports such as Los Angeles or New York, where they are offloaded.
Customs Clearance: Once the containers arrive, they must go through customs. This is usually the job of a customs broker. They ensure that all necessary documentation is provided and proper tariffs are paid.
Moving Goods from Ports: After clearance, the goods can be transported to local warehouses, distribution centers, or directly to retailers. At this stage, freight brokers may facilitate the trucking process by providing quotes and organizing the logistics.

Distribution Center and Warehousing

Once imported goods arrive in the U.S., they often go to distribution centers or warehouses. These facilities serve as critical points in the supply chain:

Purpose: Distribution centers allow companies to store large volumes of goods efficiently and serve as a hub for shipping to retail locations or final destinations.
Efficiency: Instead of shipping goods directly from the port to a retail location, companies can route them through distribution centers, which helps optimize shipping costs and time.

Modes of Transportation

Various modes of transportation are utilized within the supply chain:

Truckload (TL): A dedicated truck is used to transport a single customer's shipment. It’s typically used for large shipments.
Less-than-Truckload (LTL): This method involves multiple customers’ goods being combined on a single truck to save on costs.
Partial Truckload: This is a hybrid of the TL and LTL methods, offering a mix of dedicated and shared space.

Check Calls and Due Diligence

Good freight brokers perform due diligence by verifying carriers before dispatching loads. Critical steps include making check calls to ensure the carrier’s information, including their MC number, is valid.

The Importance of Communication

One of the key takeaways from this episode is the importance of communication between brokers and their customers. Brokers should actively ask questions to determine the best shipping method based on factors such as price, time, and specific needs of the cargo.

By understanding these dynamics, brokers can add significant value by presenting multiple options tailored to the customer’s needs.

Keyword

Keywords: Supply Chain, Freight Forwarding, Customs Brokerage, International Imports, Distribution Centers, Truckload, Less-than-Truckload, Partial Truckload, Check Calls, Communication.

FAQ

What is the supply chain?
The supply chain is the system of processes and activities that moves goods from production to the end consumer.

What is a freight forwarder?
A freight forwarder is an intermediary that organizes the shipment of goods from the manufacturer to the market, often handling logistics, customs, and insurance.

How does customs clearance work?
Customs clearance is the process of getting goods through customs by providing necessary documentation and paying any applicable tariffs.

What is the difference between LTL and TL?
Less-than-Truckload (LTL) involves shipping smaller amounts of goods from multiple customers on one truck, whereas Truckload (TL) involves using a dedicated truck for a single customer's shipment.

Why is communication important in freight brokerage?
Effective communication ensures that freight brokers can tailor shipping solutions to meet customer needs based on various factors such as cost and time, ultimately leading to better service and relationship-building.

In conclusion, the supply chain is complex, involving numerous steps and factors that brokers must navigate to effectively serve their customers. Understanding these components enhances efficiency and overall performance in the logistics industry.