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Overcoming the Challenges of Middle-Mile Delivery and Controlling Freight Budgets
While last-mile delivery gets much attention in achieving timely deliveries, the importance of middle-mile delivery is often overlooked. It is as vital in the global supply chain as last-mile delivery.
So, let's find out what middle-mile delivery is, why it is important, what common middle-mile challenges exist, and how you can overcome them.
What is Middle Mile Delivery?
Middle-mile delivery involves transporting shipments from warehouses, factories, ports, or distribution centers to fulfillment centers or regional distribution hubs. Essentially, it is the movement of a consignment between two temporary facilities for further distribution.
In this delivery phase, the goods are moved overlarge distances, crossing various states or even international borders. During this phase, goods need to be moved to the next leg of delivery quickly and efficiently. The entire supply chain can be disrupted if any issue arises in middle-mile logistics.
Why is the Middle Mile Important?
Optimizing load and better route planning leads to efficient middle-mile delivery. It helps transport goods smoothly from the warehouse or primary location to secondary distribution centers. It reduces operational costs, increases the supply chain's efficiency, and improves customer satisfaction. If this phase of the delivery is not smooth, it can lead to the following:
- Delays in shipments, leading to cost incurred due to demurrage and detention.
- Longer transit times and increased costs.
- Mishandling of shipments or even loss of shipment visibility.
- Operational inefficiencies.
Common Middle Mile Logistics Challenges
Middle-mile delivery is like a bridge connecting the first and last mile. Without it, a supply chain won't function smoothly. So, it's essential to know the challenges of the middle mile and how to overcome them.
Congestion at Docks and Ports: Congestion occurs when incoming shipments exceed a dock or port's processing capacity. This congestion means a driver cannot pick up the container within the allotted free time, leading to the shipping line levying demurrage charges.
Delays in Unloading the Cargo: Since first, middle, and last-mile delivery are all interconnected, a delay in one phase can snowball into a bigger problem, like a delayed shipment. Staff shortages, inadequate port infrastructure, limited dock availability, and insufficient handling equipment at the facilities can be the reasons behind the delay.
Customs Clearance Roadblocks: One of the challenges faced during middle-mile delivery is getting customs clearance for international shipments on time. The problems can include:
- Inconsistencies and errors in the documentation provided for customs processing.
- Non-compliant shipments.
- Not fulfilling the regulatory requirements.
It can lead to containers being held up in customs and incurring demurrage and detention fees.This can further result in loss of revenue and, ultimately, disruption in the supply chain.
Insufficient Warehouse Capacity: When the demand surges or there is an unexpected spike in inventory, the volume of incoming shipments exceeds the available storage at warehouses. It can result in delays in moving containers off-site. This leads to congestion, lowers productivity, and raises the operational cost. Further, containers that cannot be promptly moved to warehouses may incur demurrage fees from shipping companies for exceeding the allowable free time.
High Freight Container Shipping Rates: The freight container cost has risen since the start of May this year. According to CNBC, with the peak shipping season just starting, freight spot rates went up some 30%. It is due to port productivity, sudden ocean container shortage, global conflicts, and the need for shippers to keep up with the market.
If the empty container does not reach back to the port at the appointed time, that container will incur detention fees. These fees can accumulate quickly, leading to substantial additional costs that can disrupt budget allocations and increase the overall cost of the supply chain.
Cost Escalation: Supply chain disruptions caused by wars, political unrest, drastic market fluctuations, or other unforeseen circumstances can create challenges in middle-mile delivery.
Other mid-mile logistics challenges include congestion at ports, inefficient route planning, delays in unloading, and lack of transparency. All these middle-mile delivery challenges lead to cost escalation and leave a negative image on the customers who may choose to work with other companies.
How to Overcome Middle Mile Challenges?
Knowing middle-mile challenges is only half the battle won. Understanding these challenges but not taking action to overcome them is just as bad as not knowing about them at all. So, let's find out how you can overcome these challenges.
Get an Appointment in Advance
Reaching the pickup location without a prior appointment is a big mistake, especially during peak season.So, always schedule pickup appointments in advance. It will help avoid. congestion, reduce wait times, and save money you might have to pay for demurrage or detention.
Additionally, you can ensure that you comply with all necessary regulatory standards and have ally our essential documents in place to avoid any customs clearance issues. This will speed up the loading process for your cargo.
Optimize Unloading Operations
To ensure efficiency in unloading operations, it's crucial to maintain adequate capacity. This involves not only having enough space for operations but also the manpower and resources to handle peaks in activity. Establish robust systems to monitor all containers and shipments, particularly their dwell time on yard premises. This oversight allows for identifying which shipments have been on the yard too long and need urgent processing. Implementing these strategies ensures a smoother flow of goods and reduces bottlenecks in the supply chain.
Further, it is essential to train employees to improve unloading time and make them aware of potential D&D fees for long dwelling containers. They must know how to properly process containers in the correct unloading sequence. Keep them informed when planning the unloading schedule so that they can make informed decisions.
Ensure Accurate Documentation and Goods Classification
Ensuring you have all the necessary documents correctly signed is one way of avoiding delays due to customs clearance. These documents can include:
1. Proof of insurance
2. Port spending
3. Bill of lading
4. Commercial invoice
5. Packing list
6. Certificate of origin
7. Transportation invoice
8. Export and import certificates and declarations
Additionally, when shipping goods, remember to describe and classify them accurately. For instance, if you're shipping electronic components, specify whether they are resistors, capacitors, or semiconductors rather than using a generic term like"electronics." It will help customs officials understand what is imported and apply the correct tariffs accordingly.
Invest in Technology for Accurate Demand Forecasting
Getting more warehouse space is not the only way to improve item availability. You can also do that by effectively utilizing the existing space. Leverage the data that you already have to forecast demand accurately.
A better way to do that is to invest in a warehouse management system with demand forecasting capabilities. It will help you track inventory in real time and analyze data to identify seasonal trends and patterns. Understanding these patterns allows you to adjust your inventory levels appropriately and avoid overstocking and exhausting your warehouse capacity.
Track Shipments in Real-Time
Getting real-time data about containers in transit through real-time milestone tracking helps you know well in advance whether the load will make it on time. Many platforms are available online that you can use for the same. Northbound is one such platform that not only utilizes real-time container data but goes beyond it with an execution layer to use that data for decision making.
Using it, you can get up-to-date information on each of your containers. You'll know which containers are currently incurring demurrage and detention charges, which ones are at risk of these charges, and which ones are clear. This enhanced visibility will empower you to proactively address any disruptions, save time, and strengthen operational controls.
Improve Your Middle-Mile Efficiency with Northbound
With Northbound, you can now easily reduce demurrage and detention costs, track them in real time and make your middle-mile logistics more efficient. Our AI gives businesses like yours live cost transparency, so no unexpected charges catch you by surprise.
Schedule a demo today and take active control of your supply chain to start saving on demurrage and detention costs.
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