How our cross-border milk run solutions enabled better supply chain control and greater financial gains for the customer.
The customer is one of the world's leading designer, marketer, and distributor of authentic athletic footwear, apparel, equipment, and accessories for a wide variety of sports and fitness activities.
Logistics plays a vital role in maximising efficiency and competitiveness in their multichannel business throughout the world. They house several of the multi-brand consolidation centres for the merchandise from Asian suppliers in South East Asia which are subsequently distributed in cross-dock to the company’s franchise network.
Previously, the customer’s cargo transportation depended solely on air and ocean freight. This led to high carbon footprint and cost, blank sailings, and equipment shortages, resulting in long lead times. COVID-19 lockdowns imposed in countries around the world caused unprecedented disruptions in the customer’s logistics. The pandemic affected every entity in their supply chain, leaving them with limited ocean freight and overland transportation options that could provide a shorter lead time in Southeast Asian countries.
The customer sources their manufacturers in Vietnam, Laos, Thailand, Malaysia, and Singapore who come with several touch points for cargo release. They needed a state-of-the-art cross-border land transportation handling and distribution management system along with an experienced logistics partner to develop a robust model and implement it successfully.
Maersk and the customer worked together to implement flexible and reliable solutions that enhance their current processes and efficiency, through the pandemic and beyond.
- Reduced lead time and competitive costs: We streamlined the existing solution by building a cross-border milk run solution – a delivery method used to transport mixed loads from various suppliers in the warehouse, allowing the customer to move small quantities of a large number of items with predictable lead times and without multiplying transport costs.
- Increased Efficiency: We designed and customised the process flow based on volume data and historical movements to make it efficient.
- Reliability: Daily and weekly circular routes are now scheduled to ship items more frequently and in smaller lots in order to maintain schedule reliability and alleviate capacity issues with air and ocean transportation.
- Sustainability: Truck utilisation is at its maximum to further reduce cost and carbon footprint.
- Customs services: We work closely with the customer’s Customs House Broker to ensure that shipments arrive on-time for cargo releases.
- Visibility: End-to-end visibility with the use of Tradelens.
- Efficient storage: Reduce inventory holding levels in Local Distribution Centres (LDC) at the destination.
The new process with Maersk
With a collaborative approach from the countries involved, the solutions ensured the customer now has a single point of entry, visibility and control of the sourcing and consolidation process. This has led to an increase in management efficiency and a scalable solution that allowed for improved cost efficiency, less waste, reduction in transportation and emergency costs.
The solution gives the customer the confidence to plan their supply chain more efficiently, with agile predictability, while minimising administrative work to conduct bookings. The improved utilisation of trucks also lowered the transportation cost per cubic meter (CBM), and Maersk continues to mitigate exposure of cargo rolling over to effectively manage delays.
Maersk's proactive and innovative working style has enabled the customer to have an uninterrupted supply chain. This is a solid relationship that will only continue to flourish.