With Oct. 1 Deadline, Supply Chain Chaos Looms

The upcoming Gulf and East Coast port strike is a clear reminder of the value of adopting a 4PL/guardian model to handle supply chain disruptions.

Employers might reach a deal with the International Longshoremen’s Association before the scheduled Oct. 1 strike. But I find that possibility increasingly slim. And for each week the dockworkers strike, your business should brace for a month of port congestion.

Fortunately, it’s not too late for Tompkins Ventures to help you find alternatives to the impending disruption. But with time running out, your choices are narrowing fast.

What Is a Guardian/4PL Model?

I have been advocating for the 4PL/guardian model for years. Back then, I was warning supply chain leaders not to count on shipping container prices of $1,500 lasting forever.

At its core, the model involves a freight forwarder managing all aspects of your transportation. This includes working with your 3PLs, transportation providers, relationships with shipping lines, your MQCs (minimum quantity commitments), even other freight forwarders. The 4PL/guardian optimizes each lane by cost and service, maintains a complete understanding of your entire supply chain, provides you a single point of contact and ensures your paperwork keeps you out of trouble with regulatory authorities.

I’ve seen this model reduce lead times by up to 20% and save clients seven figures on accessorials, like detention and demurrage charges. And that’s just the start.

But you have to pick the right freight forwarder. Most won’t optimize your freight by potentially utilizing another freight forwarder. You’ll often hear, “Sorry, Bob. We’re all out of capacity.”

Tompkins Ventures partners with freight forwarders who take a different approach. They recognize that finding capacity – even with other freight forwarders – serves the client best. And when you put the client first, they stick with you.

Those are the type of companies you want to partner with.

Enterprises Look West, North as Strike Deadline Nears

A Gulf/East Coast port strike will hit more than half of U.S. imports and disrupt 15% of the global shipping fleet. Every week dockworkers on the East and Gulf Coasts strike will add a month of congestion.

Realistically, your enterprise should have done what Tompkins Ventures has been helping clients do for months: Build inventory. Yes, holding inventory adds cost. But that cost pales in comparison to not delivering to your customers when your competitors can.

That inventory buildup has contributed to massive increases in shipping volume. The McCown Report noted a 20.9% increase in July’s inbound container volume compared to last year, following a 17.9% increase in June.

I expect August and September volumes to show a similar trajectory – up.

Our 4PL/guardians have shifted some volumes to West Coast ports. That’s the opposite of what we did last year when the major worry was a strike by dockworkers on the West Coast.

This perfectly illustrates why a 4PL/guardian model is a better overall solution versus direct negotiations with steamship lines. 4PL/guardians operate across the freight forwarding and shipping universe, leveraging relationships to renegotiate and secure capacity where others cannot.

In addition to West Coast ports, I’ve seen 4PL/guardians reroute European shipments through Canada. The ports of Halifax and Montreal can handle additional capacity and are near rail networks, making them a viable option.

The Expensive, but Friendly, Skies Can Help

The air freight option is last, and preferably least. But we are heading to the skies for some key shipments.

Yes, air freight is the most expensive shipping mode. But for key customers and products, you pay the price. You don’t want to shut production and risk losing your current customers.

Chartering a plane or booking an air shipment can keep your operations operating and your customers satisfied when your competitors’ supply chains are stalled.

Secure Your Supply Chain with Tompkins Ventures’ 4PL/Guardian Model

The looming Gulf and East Coast port strike will create significant disruptions to U.S. and global supply chains.

If you’ve waited this long, your options are limited. But securing a 4PL/guardian model now can minimize the pain and help you navigate future disruptions with flexibility and resilience.

I would love to discuss how the 4PL/guardian model can safeguard your supply chain through this and future disruptions. And make no mistake – there will be more chaos.

Let’s select the perfect partner to provide you with the capacity, reliability and cost savings necessary to keep your operations running smoothly. Make sure your business delivers to your customers, no matter the disruption.

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