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How will the United States improve their supply chain visibility?

on April 9, 2019 No comments

The Trump administration has not been shy to cause controversy in both national and international affairs. With campaign promises to build a wall between the Mexico-United States border and threats to impose tariffs on Mexican goods, organisations must now evaluate the damage that such events will have on their supply chain. To make matters worse, the Trump administration has recently reassigned 750 inspectors away from ports of entry to deal with migration which has created hours-long waits at the border. It is the president’s tougher immigration policy that has now also played a role in the resignation of Kirstjen Nielesen, US Homeland Security Chief.

Approximately $177 billion of U.S. exports and $246 billion worth of imports make their way across the Mexico-United States border each year by truck, based on data from the U.S. Bureau of Transportation Statistics. Mexico is the third largest trading partner for the U.S. behind Canada and China. The automotive industry makes up a large portion of that trade. The U.S. also receives more than 40 percent of its fruit and vegetable imports from Mexico, according to a 2017 analysis from the U.S. Department of Agriculture.

With estimated wait times increasing to cross the border, the financial effect on companies is proving to be very damaging. Estimates from the San Diego Association of Governments have shown that delays at the border can add up to billions of dollars in economic losses and cost thousands of potential jobs.

“The longer these delays get, the bigger the economic impact can be because businesses have to make monumental decisions”

Gary Becker, Chief EconomistWashington D.C., based consulting firm Catalyst Partners

When the produce being transported is fruit and vegetables, any disruption in the supply chain can lead to substantial losses because they are perishable goods. It is situations such as this where the application of ParceLive can provide greater visibility into supply chain operations and allow users to make pro-active decisions relating to the condition of consignments. When alerts of exceptional events are trigged – such as a shipment being dropped, opened, tilted or in this case, exposed to temperature or humidity outside of defined parameters, the user will be informed via the Hanhaa XG network to the ParceLive portal. This auditable data can aid in resolving disputes as it allows everyone to identify the facts behind late and damaged goods.

In some cases, truckers may turn off their engines to save fuel meaning that the power supply to refrigerators will be turned off. Fruit and vegetables will soon expire if exposed to high temperatures for extended periods of time. In situations such as this, ParceLive users will be alerted in real-time of the rise in temperature which will give them the option to get in touch with the appropriate party to inform them of the risk being placed on the goods being transported.

ParceLive sensor

ParceLive will, therefore, put shippers in control by enabling them to see what’s really happening and trending within their delivery network. Customer service will also be dramatically improved by enabling shippers and logistics suppliers to identify where delays and issues are happening and report back to customers.

The automotive supply chain is also heavily affected by these border crossings. Car parts tend to be manufactured in one country and then need to be shipped abroad to be matched with other parts. If delays become a common occurrence, organisations will need to start holding larger reserves of parts so they have enough products to keep their factories running. This will then undermine the benefits of the JIT automotive, and effect decision makers in the supply chain.

For businesses heavily dependent on goods arriving at the right place at the right time, reacting to supply chain failures can be just as important as preventing them. ParceLive is enabling those using just in time deliveries, specifically in the automotive sector, to react and be pro-active about failures in real time.

If your organisation is heavily dependent on cross border shipments, then get in touch with us to find out how ParceLive is the solution for you.

Stephen hartnettHow will the United States improve their supply chain visibility?