The Impact of Shipping Cancellations
Hello, I’m Ichiki of Sync Logistics.
In this issue, I’d like to share my thoughts on the impact of shipping cancellations and the importance of countermeasures to deal with such cancellations.
■ What happens when shipping requests are cancelled?
In the used car export industry, container shipping can only proceed with the cooperation of various parties such as shipping companies, transport companies, related companies and forwarders. Because many steps are involved with different people in charge of each step, the shipping process can be severely impacted depending on the timing of the cancellation.
For example, when a shipper asks a forwarder to ship something, an operations staff member sends a pickup order to the shipping company and coordinates the date and location of an available container. Then, an instruction sheet is created, and a drayage company is commissioned to transport the container to a yard. While the container is being prepared, the cargo (used cars) is brought in, warehousing procedures and inspections are conducted, then staff proceed with vanning.
If work progressed up until the vanning stage, more than 10 people will already have been involved. A cancellation at this stage will waste all the work done and the facilities used, and reversing the process will also incur costs.
■ Prior arrangements are necessary to fully utilize personnel and facilities
However, generally in Japan, companies do not charge shippers for cancellations, as each company involved often bears the resulting losses, and risks are factored into the prices set by these companies. If these companies hedge their risks by passing on the costs, shipping costs will also increase, which will also raise shippers’ shipping costs.
To prevent this vicious cycle, I think that the following countermeasures are necessary:
- The logistics provider will inform the shipper of the extent of the cancellation’s impact
- Establish the cancellation deadline and formalize the agreement
By setting rules beforehand and making sure all parties are on the same page, cancellations during times when the impact will be severe will be eliminated, and costs to shippers can be reduced. Because it will be easier to fully utilize resources such as personnel and facilities, more shipping requests can be fulfilled, and it will be easier for us to support shippers’ businesses.
Due to the continued labor shortage in the logistics industry, all parties must cooperate with each other while effectively utilizing resources and finding ways to increase productivity. We will spare no effort to achieve this, and we will continue to create logistics systems that will allow us to export as many vehicles as possible.
Thank you for your time.
