One of our largest US Customers, in the fashion retail business, based in New York, importing from Italy and China, was shipping 80% of all his freight by air, and 20% by ocean. This was affecting the price of the final product.
Production was made in Shenzen area, and all the freight was shipped out of Hong Kong – All freight was moving to their Connecticut Distribution Center.
At the speed that Fashion Industry is moving today, the factory in China could not keep up with the production time required by our customer, last minute changes in colors and materials were happening every day.
From Hong Kong to New York the transit time could vary from 30 days for the All Water Service to 25 days for the Mini Land Bridge service, with all the problems related to the rail system. This means that by ocean they were looking at a 40/45 days transit time door to door. This kind of transit time was too long to respect their customer delivery request.
At that point EVERYTHING was moving by air freight, with a door to door transit time of approx 7 days. Transit time was very good, but freight charges were really high.
Air Freight from China to New York is very expensive and the shipping costs was strongly affecting the final pricing of the goods, and they were running the risk not to be in line with competition.
In 2010 Apple launched the IPad – The big success of the tablet made that product unavailable in USA, Apple could not keep up with production and with shipping. In order to make sure that all the IPads were delivered before Thanksgiving, Apple chartered most of the flights from Hong Kong to USA for almost 2 weeks!
This was creating a big disaster for our customer, with all the freight stuck in Hong Kong, they were running the risk not to have their freight into their store before Thanksgiving.
Missing Thanksgiving sales could have strongly impacted on their business!
We studied the problem and since it was hardly impossibile to find any flight for 2 weeks, we looked into an ocean alternative.
At that time NYK LINES had a service from Hong Kong to Long Beach of approx 12 days –
Our warehouse would have unloaded the container in our facility at Long Beach pier, and the freight would have been transloaded into trucks with double team driver to drive NON STOP to Connecticut – Time was really tight, but this looked like being the only solution –
On October 26th we had 4 x 40’ sailing on the SS NYK CONSTELLATION from Hong Kong port – Containers were booked as TOP PRIORITY EXPRESS UNLOADING –
Vessel arrived in Long Beach port on November 8th, our container were the first to be unloaded – Freight was Customs cleared and on the same day and very late at night 3 x 53’ trucks departed from our facility in Los Angeles – With the double team driver, they were able to run the 2900 miles that separate Long Beach to Connecticut in only 2 days and in the morning of November 11th freight arrived at destination.
Our customer was able to deliver the goods in time and they did not loose the Thanksgiving sales.
But the most interesting fact was that the total freight charges for this job were approx 75% less than what they had estimated for the air freight shipping.
They also figured out that in this way they could have a transit time of approx 15 days, which was acceptable to deliver their goods on time.
Thanks to the positive outcome of this shipment, today the company is using this method for 80% of their shipping, with a substanstial saving on their shipping costs.