The problem: 8,000 forty-foot containers full of car parts travelling from Vancouver to Michigan every year, and returning empty.
The solution was a creative one – and by using the Transport & Logistics structure to bring in Damco Distribution Services (DDSI), Maersk Line reduced the complexity involved and created savings for one of its biggest customers, General Motors.
“There just isn’t much cargo going back to Asia from Michigan, so we needed to include in our ocean freight prices the cost of getting those empty containers back to where we needed them,” says Neil McGuire, Senior Key Client Manager for Maersk Line.
Joint business plan
Maersk Line has been the recipient of GM’s Global Supplier of the Year award for four years and that strong relationship enabled McGuire to work with his counterparts at GM on a joint business plan to address the issue. And, after nearly 12 months of planning, the result was an end-to-end package with Maersk Line handling the ocean transport and DDSI taking over the inland logistics once the car parts arrived in Vancouver, Canada.
The mechanics of the agreed arrangement are simple: Once in Vancouver, instead of sending the 40-ft ocean containers inland across the United States to have them sent back again empty, all of them would remain in Vancouver. Using its nearby facility, DDSI would take the car parts out of the 40 footers and “transload” them into 53-foot containers owned by Canadian railroad operator, CN Rail, to be sent by rail to Michigan.