UK importers - 4 reasons you should seriously consider engaging a logistics consultancy

Afternoon All

Here's something well worth reading, especially as it is so well put and dispels a lot of the myths/concerns about appointing an external source of expertise.

It's written from a generalist perspective on any consultant, but I think it's particularly relevant to logistics, particularly as regards market knowledge, an objective viewpoint and actually getting the job done.

With everything that's happened following the BREXIT referendum, most notably the 20% fall in the value of sterling against the USD and EURO, which, for importers, is destroying their margins and causing them to have to raise their prices (and potentially lose customers) this is even more relevant.

If you can work with a consultancy who are true experts in their field and can deliver a real and measurable return on investment, now would would be a good time to act. 

I should add that we do operate using a gain share fee model for our freight review product and customers seem to like not only the financial savings but also the benefits of a refreshed, more responsive and robust supply chain model. The testimonials speak for themselves!

Our latest customer testimonials

***************************************************************************
If you're looking to improve your supply chain, you may have considered using the services of a logistics consultant. You might be worried, though, about whether it will be worth the cost or bring any real benefits to your business. Here are some reasons to seriously consider using a consultant.

Product Knowledge

Working with a logistics consultant who has a broad knowledge base and experience working through similar issues to those you are experiencing brings a number of advantages to your team.

You'll probably have received loads of literature from sales people, for example, telling how great their products are, but how can you possibly choose between them? An independent logistics consultant is not selling products and does not get any financial incentives from the products they specify, therefore they can give objective advice.

A project run internally can often get sidetracked by everyday management issues. Bringing in a consultant who can focus on delivering results will ensure that the goals are achieved quicker.

Consultancy does not need to take project ownership away from the management. However, as long as management is clear about its objectives and is able to select, direct and manage the consultants carefully, real added value can be seen.

When Should I Use a Consultant?

All organisations at some time reach a point when they are aware that they could be doing things better or differently. It may be one or several areas of the operations that are not achieving their goal or not functioning as efficiently as they might.

The main reasons for using consultants usually focus around:

o Complexity
o Timescales
o Expertise
o Resources

Efficient Staffing

The issue or problem may be short-term. To manage the change effectively and maximize the benefits will require an intense effort, potentially jeopardizing the performance of the rest of the operation. Permanently increasing the headcount to handle a short-term project will increase operating expenses. A consultant can assist in managing the change until the introduction is complete and the operation has stabilized.

Often specialist knowledge exists within the company but a secondment cannot be arranged in the required time frame. Consultants are ideally suited to providing the skills that are not available from permanent staff.

Decisions which result in a large change or financial commitment from the company will frequently involve consultants to review any analysis before a decision is made. An outsider can ensure that an objective approach and attitude are taken and that all potential alternatives are known and explored. Often the consultant will know of additional alternatives which were not even considered previously. At other times just having the consultant confirm competent and thorough analysis can add additional weight to the business case.

If a project has lost momentum or is not delivering the expected results a consultant can quickly provide the input required to get it back on track.

Working With a Logistics Consultant

The use of consultants is unlikely to bring benefits if you dismiss the consultants' involvement as an expensive distraction from everyday operations. However, if you chose the right consultant or consultancy, clearly define the project objectives, provide the consultants with the information they require and set aside time to review progress and buy into their ideas, the benefits will be seen.


*************************************************************

If you read through that and found yourself agreeing with the article, then don't let the moment pass, just make contact (preferably with ourselves!) and I am sure that, provided you select a professional company, you will be so glad you took action, and so will your customers, colleagues and your bottom line.


Andy Cliff is an industry professional who launched his own logistics consultancy, Straightforward Consultancy Ltd (SCL) after a 30 year career in international logistics, working for companies such as DB Schenker, Kuehne & Nagel and DHL Global Forwarding in operational, sales and management roles. 

Andy was part of the judging panel for the 2016 Global Freight Awards, his second year in this prestigious role. The awards recognize quality, innovation and performance in the field of international logistics.

Andy felt that in an increasingly complex and confusing world of logistics, UK importers and exporters needed a company alongside them which could help them to reduce costs, lessen their workload and provide expert advice and support day-to-day. 

UK importers - is the strong dollar giving you a headache?

Since the BREXIT vote, Sterling has fallen against the dollar by around 20%, which is a huge drop, especially if you are one of the 220,000 importers here in the UK. Given that most companies who source from outside the EU are buying from Asia or the USA, their suppliers are most likely selling to them in USD.

Understandably, most importers watch the sterling exchange rate with the USD like a hawk, and some even buy forward, fixing the exchange rate to protect themselves against negative swings which is prudent, although of course it's hard to know how much to buy forward when you don't have a crystal ball...!

Although we monitor exchange rates each day in our business here at SCL, and we saw the rapid fall from circa USD 1.50 pre-referendum to around USD 1.30 shortly afterwards (and recently down to USD 1.20) it seems the public and media have only just realized that the weak pound will have a marked inflationary effect and so almost every day now, we see reports talking about the impact on UK inflation, and we see clear examples, such as petrol prices rising sharply, or talk about Apple jacking up the price of their latest Macbook to compensate for the weak pound.

To be honest, when I see these reports, I wonder whether senior management within these importers also realize that their freight costs, be that air or ocean, are also priced in USD, and so not only are their product prices rising, their freight costs are rising by 20% also. Furthermore, as import duty is based on the "built-up value", consisting of several elements, this includes freight costs and so import duty costs are also increased.

We've been trading since 2009 and we know the freight and logistics marketplace pretty well, and when we review a customers import traffic, we focus on several things.

• Review the service levels to ensure they match the customers' needs
• Assess freight costs and whether they are market competitive
• Is the information flowing to the right stakeholders
• Are the customers' shipments being correctly declared to Customs (duty could also be over-declared)
• Is the pricing stable

The telling thing is that over the last 7 years, we have measured an average 35% freight cost saving across all the freight reviews we have carried out, and this is usually a shock (and also a pleasant surprise) for the customer. The reason is two-fold - we know what to look for when reviewing a customers' current logistics model - and we have strong partnerships with logistics providers who are competitive and reliable.

So, before you reach a decision about raising your UK selling prices, do yourself a favour and just make sure that your freight and duty costs are competitive, as you may preserve some margin, retain the customer or even give yourself an edge against your competitors who knee jerked into a large price rise - and still took a hit on their margins! As a consequence, you may also find that you are wasting money on a service which actually doesn't even meet your current needs.

So, just some advice really, business is hard enough as it is so just make sure you look at everything before you do raise prices and you'll not only be a leaner business, you'll also be better prepared if the business environment gets tough in 2017.

If you take a look at our customer testimonials, I am sure you will be impressed, companies large and small rate us highly and our very first client from 2010 is still on board today. I have also been a panel judge at the Lloyds Global Freight Awards for 2 years so we're known as industry and market experts.

Andy Cliff is an industry professional who launched his own logistics consultancy, Straightforward Consultancy Ltd (SCL) after a 30 year career in international logistics, working for companies such as DB Schenker, Kuehne & Nagel and DHL Global Forwarding in operational, sales and management roles. 

Andy was part of the judging panel for the 2016 Global Freight Awards, his second year in this prestigious role. The awards recognize quality, innovation and performance in the field of international logistics.

Andy felt that in an increasingly complex and confusing world of logistics, UK importers and exporters needed a company alongside them which could help them to reduce costs, lessen their workload and provide expert advice and support day-to-day.