22 February 2023

Container Unpacking Delays

A quick message to all our amazing customers who may have FCL inwards goods that have arrived or will arrive soon. We are sure most would have read about the delays at the ports, over the last few of months, and it would seem going forward we are also having major issues with congestion at empty container parks.

For those of you not 100% aware of the issues or need more details of exactly what is happening with all unpack yards please see the below explanation.

Currently there is a massively disproportionate volume of empty containers in Auckland. This means that the empty container yards which work for the shipping lines are full or in some cases overfill, which is causing them to shut and therefore not accept MT containers.  The current wait times seem to be anywhere from a week to two weeks to get a space.

So that means that the cartage companies can’t pick up the empty containers out of the depots (such as DSL) that unpack them, without having somewhere to take them, because obviously they can’t stay onboard the trucks.

Some cartage companies have yards they can hub them back too, but this incurs costs, that end up getting passed back on to you the end customer. After all it is not the FCL cartage companies’ fault that the de-hire depots are full. Yes, it costs extra if the cartage company does hub the boxes somewhere, however the alternative is even worse, because it means that they don’t collect the containers from the people who unpack them. The roll-on effect of that is that no more full containers can be received by the unpacking depots.

This causes further costs and delays in getting what may be urgently needed stock in. So, your cargo is delayed, and to add insult to injury you will also be hit with huge demurrage and detention costs as well.

We as a company who unpacks containers on behalf of our customers are being pushed into an awful position. We are trying to help all our customers, by devanning as many boxes as we can each day, however unless the empty ones are removed each night, or in a timely manner, we can’t get more full ones in to help either yourselves, or other customers with the urgent unpacks that are required. It is a vicious circle, and we are all left just going around and around every day, for weeks and weeks, with no certainty of the situation being fixed.

And we all end up paying a price. Please put pressure on your shipping lines to not only find a solution to this problem, but also to stop charging Detention on containers that everyone is trying to return but the depots those same lines choose to contract too, are full, and won’t accept bookings. The shipping lines are the only ones who can fix the problem.

Please be patient with our inwards team as they are trying to get the containers moved around so that we can get your freight processed as urgently as we can. I suppose this is just another link in the supply chain crisis we are all facing!

John Widdows

30 January 2023

One Damn Thing After Another

We were preparing to find out how many of our staff will not be able to come back to work tomorrow, due to possible flood damage to their homes and cars.

We have now received this advice: in the face of a weather forecast for heavy rain on the night of Tuesday to Wednesday, the Secretary of Education directed all schools in Auckland to shut down for one week, until February 7. Details in the NZ Herald. Maybe this decision was made ‘out of an abundance of caution’.

Measures like this have historically resulted in as many as half our staff being unable to attend work. We will update you later in the week, but you can expect processing times to get worse before they get better.

Daniel Silva

Auckland Floods – Stock Safe

We inspected our five warehouses in Auckland, following the floods of last Friday evening. There was no water ingress in any of the warehouses and no stock was damaged.

It is too early to tell how the floods will impact on our work. It is likely that some of our colleagues will have to attend to flood damages to their properties and/or cars. We can’t assess the extent of those factors, as today is a public holiday in Auckland. Our Customer Services staff will provide more information as it comes to hand.

Daniel Silva

16 January 2023

Empty Container Returns

We are starting to see increased pressure on empty container yards, to the point where they have started to reject new deliveries.

You may have experienced this already, or soon will. We have become an informal hub for empties with nowhere to go, which in turn limits the number of containers that we can fit into our yards.

To add insult to injury, some shipping lines are charging importers for so-called ‘detention charges’ when they fail to return the empty containers by the due date. One legal advisor with specialist knowledge in this area, Pauline Davies of Fee Langstone said, 

“The obligation on cargo interests is to return containers to the place nominated by the carrier, within the free period. It seems to me that if a place of redelivery is either not nominated by the carrier, or if it is impossible to return containers to that place, the right to charge detention does not arise. Contractual performance is simply not possible. If [the shipping company] continues to nominate a place that won't accept empties, arguably the nomination is invalid.” Hat tip to CBAFF

If you have any questions regarding this, please feel free to reach out.

Aaron Hobbs

05 January 2023

Artificial Intelligence In Logistics

ChatGPT is all the rage in nerd circles. It is an Artificial Intelligence large language model that sounds eerily human. Just read the transcript below of a session for an idea of what you can get. Then, go over to https://openai.com/blog/chatgpt/ and give it a go. It could be more entertaining than playing Scrabble on a rainy day by the beach.

Daniel Silva

Transcript of a ChatGPT Session

How do I calculate stock turns?

Stock turns, also known as inventory turnover, is a measure of how quickly a company is able to sell its inventory over a given period of time. To calculate stock turns, you can use the following formula:

Stock turns = Cost of goods sold / Average inventory

To calculate this, you will need to know the company's cost of goods sold (COGS) and the average inventory for the period being measured. The cost of goods sold is the total cost of the inventory that was sold during the period. Average inventory is calculated by taking the average of the beginning and ending inventory levels for the period.

Here is an example of how to calculate stock turns:

Let's say a company has a cost of goods sold of $500,000 for the year and an average inventory of $100,000. To calculate the stock turns, you would divide the cost of goods sold by the average inventory:

Stock turns = $500,000 / $100,000 = 5

This means that the company was able to sell its entire inventory five times over the course of the year. A higher stock turn rate indicates that the company is able to sell its inventory more quickly and may be more efficient at managing its inventory. A lower stock turn rate may indicate that the company is having difficulty selling its inventory or that it is carrying too much inventory, which could lead to higher storage and carrying costs.

Where do I find stock turns benchmarks for sports footwear?

There are a few different places where you may be able to find benchmarks for stock turns in the sports footwear industry. Here are a few options:

1. Industry trade publications: Many industry trade publications, such as Footwear News or SGB Magazine, publish regular reports on key performance indicators in the sports footwear industry, including stock turns. These publications may also provide comparisons to industry benchmarks or to the performance of similar companies.

2. Industry associations: Industry associations, such as the Sports & Fitness Industry Association (SFIA) or the Footwear Distributors and Retailers of America (FDRA), often publish industry data and statistics that may include benchmarks for stock turns in the sports footwear industry.

3. Company financial statements: You can also try looking at the financial statements of publicly traded sports footwear companies to see how their stock turns compare to industry benchmarks. These statements are typically available on the company's website or through a financial data provider such as Bloomberg or Yahoo Finance.

4. Consultants or analysts: Consulting firms or industry analysts who specialize in the sports footwear industry may also be able to provide insights into typical stock turn values for the industry.

Keep in mind that it is important to consider the specific business goals and objectives of a company when evaluating its stock turns, as the optimal value may vary depending on the company's unique circumstances. It is also important to consider the specific time period being measured, as stock turns may fluctuate over time.

Please repeat last answer in the style of a rap singer.

Yo, it's your AI assistant here to bring the knowledge

I got a few places where you can find some benchmarks

For stock turns in the sports footwear game

Trade publications, industry associations, company financial statements,

Consultants and analysts, they all got game

But don't forget, it's all about the company's goals and objectives

And the time period being measured, don't miss it

So keep that in mind as you seek out the data

Hope this helps, now let's kick it, we outta here!

And now repeat in the style of Shakespeare.

Greetings, dear user, and allow me to impart

Some wisdom upon thee, regarding benchmarks for stock turns in the sports footwear art

Trade publications and industry associations, they have much to share Verily, company financial statements and consultants and analysts do declare

But remember, context is key, with business goals and objectives in mind And the time period being measured, do not be left behind

Thus, these sources do offer guidance and direction In finding benchmarks for stock turns, with circumspection

Can you create a formula to calculate stock turns in Excel?

Yes, it is possible to create a formula in Microsoft Excel to calculate stock turns. Here is an example of how you can do this:

1. Open a new workbook in Excel and create a new sheet.

2. In cell A1, enter the heading "Cost of goods sold" and in cell A2, enter the cost of goods sold for the period being measured.

3. In cell B1, enter the heading "Beginning inventory" and in cell B2, enter the beginning inventory level for the period being measured.

4. In cell C1, enter the heading "Ending inventory" and in cell C2, enter the ending inventory level for the period being measured.

5. In cell D1, enter the heading "Average inventory" and in cell D2, enter the following formula: =AVERAGE(B2:C2) This will calculate the average of the beginning and ending inventory levels for the period being measured.

6. In cell E1, enter the heading "Stock turns" and in cell E2, enter the following formula: =A2/D2 This will divide the cost of goods sold by the average inventory level to calculate the stock turns for the period being measured.

7. You can then format the cells as desired and add additional rows or columns as needed to include additional data or calculations.

Keep in mind that this is just one example of how to calculate stock turns in Excel, and you may need to modify the formula based on your specific needs and data. It is also important to ensure that the data being used in the formula is accurate and up-to-date in order to get an accurate stock turn value.

Can you provide code to do the same in C#?

Yes, it is possible to use the C# programming language to calculate stock turns. Here is an example of how you could do this:

In this example, the variables costOfGoodsSoldbeginningInventory, and endingInventory are initialized with example values. The averageInventory is calculated by taking the average of the beginningInventory and endingInventory. The stockTurns value is then calculated by dividing the costOfGoodsSold by the averageInventory. Finally, the stockTurns value is output to the console.

You can modify this code to include additional calculations or to handle different types of input data as needed. It is also important to ensure that the data being used in the calculations is accurate and up-to-date in order to get an accurate stock turn value.

10 December 2022

Supply Chain Crisis Becomes Inventory Crisis

"What was a supply chain crisis during the pandemic is now an inventory crisis with money tied up in products just sitting on a shelf. New data shows [New Zealand] companies are holding twice the level of stock compared to pre-pandemic levels [...].” This was the introduction to a well-researched news item in TV1 News on 3 December 2022. Watch it on YouTube.

29 November 2022

Inflation Predicted

These comments were made way back on 9 April 2020, during the first lockdown. A video of the interview is in YouTube. At around 3 minutes:

“If you think that you can rely on your savings for your old age – think again. We’ve been there before. In the early seventies, we had the oil crisis. Most countries went into spending huge amounts of money. That is precisely what we are doing now. So, this fifty-billion-here, fifty-billion-there must be paid somehow. The usual way is with rampant inflation and no growth.”

15 November 2022

Performance Update

This is an update on the impact of the current supply chain disruptions on our third-party logistics operations.

Stock on hand (aggregate for all clients) increased substantially over 2021:

From August 2022, there was a substantial increase in the number of units that we were ordered to ship:

This resulted in an increase in the number of units being shipped after the target date. 

Overdue Units peaked at the end of October and are continuing to decline. That is a result of us increasing storage space, acquiring new equipment, and recruiting more staff.

We continue to work hard to reduce the number of overdue units and will keep you updated on progress.

Daniel Silva

25 October 2022

Progress Report

We are still having some difficulty meeting normal processing targets. Like emergency departments in hospitals, we have had an increase in workload (in our case, sudden large-scale overstocking by several clients) accompanied by a shortage of staff. In the case of the hospitals, the consequences include the odd patient death. In our case, we have some orders being delivered to shops days late. To aggravate matters, all couriers are also currently experiencing delays.

Unlike the Government, we can’t just respond with platitudes. We were reluctant to increase wages, as we thought that you would not accept cost increases. We have now concluded that you will not have much of an option but to accept justified costs increases, like we all reluctantly accept the increases in the weekly supermarket shopping bill. This issue will be discussed with you during the next scheduled annual contractual review.

In recent times, it has been very hard for us to recruit staff. The hourly rate is not that great, and we are competing against a government that is only too happy to pay people a generous ‘job-seekers benefit’ (no questions asked), while keeping the border firmly shut to new entrants. So, we decided to advertise for new staff at a rate even higher than what a priest from Lower Hutt calls “the living wage”, the holy grail of trade unions. It worked.

Here is a report of our progress. Our plan to add fifteen new staff is going well. We have had twelve excellent applicants who will start within the week. We are implementing a new shift system that enables an increase in the operation of picking hoists from 40 to 70 hours per week. This is important, given the current delay in us receiving the additional materials-handling equipment we ordered months ago.

We expanded our total storage footprint by 2,500 m2. We racked an additional 1,500 m2 for pallet storage in the existing warehouses. These decisions alone amounted to investments of over one million dollars. 

We haven’t forgotten how to do the job, but unfortunately some of the combined effects of Covid have caught up with us. We are confident the planned changes will have us back to normal within the next two weeks and we will keep you informed of further progress. 

Daniel Silva

11 October 2022

Just In Time: The End?

Last month (September 22) we had a record 4.6 million units of stock on hand. That was an increase of 25% on the same month in the previous year. 

We expanded our total storage footprint by 2,500 m2. We racked an additional 1,500 m2 for pallet storage in the existing warehouses. These decisions amounted to investments of over one million dollars.

We also ordered more materials-handling equipment, but of course none of that is available immediately and we will just have to wait. Today, we decided on an aggressive recruitment initiative aiming to increase our warehouse staff by about twenty people, as soon as possible.

Our decisions confirm our commitment to continue to be a leading 3PL service provider delivering high quality services to our clients at a competitive cost.

Our staff have been very dedicated, many working extra shifts and overtime (over 900 hours/week, company-wide) to compensate for the reduction in labour available. Despite that, we have had increasing difficulty in keeping up with KPIs, agreed with our clients in more gentle times. The reality is that the old days of just-in-time are unlikely to return any time soon.

Given the way the market has changed in the last two years, we can no longer pursue a KPI of same-day delivery for orders received before noon. That KPI will now be to ship the order by 6pm on the following day. For large Indent shipments, we will assign a target of 21 days for completion, subject to negotiation in each case. 

We are in the process reviewing all KPIs and service charges agreed with each client and will discuss yours as part of the annual review cycle.

Daniel Silva

29 August 2022

The Most Open and Transparent 3PL

We are claiming this title. Have a look at the new “3PL Costs” page in our website. It will look like this:

You can select any period between January 2020 and last month. It updates monthly. We hope that this information can be of some help for managing your 3PL costs.

Daniel Silva

14 July 2022

Supply Chain Disruptions: They Disrupt

We are in the middle of a surge in the arrival of new stock. We are also in the middle of a second Covid wave. Not every container can be unpacked immediately on arrival. That is annoying but maybe not quite as bad as being held in a leaking tent, awaiting a turn to enter the emergency department of a hospital in our largest city.

Our staff do their best to give priority to genuine urgencies. When everything is urgent, nothing is. Containers that unload from ships in Tauranga take about three weeks to reach Auckland, a three-hour drive away.

We continue to be subject to Covid-related absenteeism and have difficulty finding new staff. There is a waiting list of several months for us to get delivery of goods-handling equipment. Most warehouses, ours included, are full to the rafters and few are being built. Yet, this too will pass. The large inventories accumulated by some importers will have to move out, sooner or later.

We have adopted several measures to mitigate the current difficulties. We leased a fourth warehouse that acts as a processing centre for the other three. That will enable us to convert the processing areas in those warehouses to high racking, substantially increasing our storage capacity. We bought two additional trucks to cover the movements to the processing centre. Our immediate expenditure on those measures was about $900k, including an additional recurring annual rent of $300k.

We will continue to provide updates on local conditions, so that they are visible to you. We ask you to work cooperatively with our warehouse managers to increase communication for both parties, so we can do the best we can during this period of disruption.

Daniel Silva