You have a product; awesome. It’s selling; even better. Have you ever thought about the steps needed to get that product to the masses? Supply Chain Solutions or Supply Chain Management is the term used when describing all the levels of transport and logistics; from pick up at manufacturing, importing, transport to retail distribution centers, product received, inventoried, and warehoused. Orders are picked, labelled, then shipped final miles to your customer. Sounds easy right? It can be, if you are prepared. If not, expect costly delays and fines from some of vendors you will need to deal with.
A lot of businesses are manufacturing products outside of Canada and importing finished goods in shipping containers. Cargo ships bring the product from overseas and dock at sea ports on the East or West coast of Canada. You should use a Customs Broker to attain clearance from Canada Border Service Agency when importing freight into Canada. If you do not fill out the forms correctly and provide all the required documentation to get the product cleared by CBSA; your freight will be held, inspected, and fees / fines will be applied. The amount of time freight will be held is unknown; we have seen as little as 3 days and up to 6 months. Fees and fines vary also, with the average being around $2500. You are basically paying for it to be unloaded, inspected, and loaded back onto the container.
Pro Tip: Hire a customs broker.
Transportation, Intermodel, and Drayage
Cargo ships arrive at sea ports in Canada; the shipping containers are taken off then either put on a chassis and transported with a truck to a warehouse or loaded onto a train to continue on to another rail terminals across Canada. When transporting a shipping containers to a warehouse from a rail or sea terminal; the term used in logistics is called Drayage.
Intermodel shipping is usually the cheapest way to transport Imported or Domestic freight. For Example, you have product that you are importing for your business in Toronto, Ontario. If the freight arrives at a west coast port like Vancouver, BC; it is cheaper to transport the containers by rail across Canada to a local Rail Terminal in Brampton, ON than it would be to ship it on a truck all the way from Vancouver, BC to Brampton, ON. With fuel costs rising, the ability to ship products in containers on rail has also gone up. Railways consume up to 9x less energy per tonne kilometer traveled than trucks.
Most container companies only give you 72 hours to have your product off the containers and the empty containers returned to rail or port terminals once it arrives in Canada. After that 72 hour window, you can expect a $100-$500 per container per day fee; this is called a “detention charge”.
Pro Tip: Plan this all out in advance, or hire us. These are costly delays and even worse if your product gets held in customers. These detention charges are in addition to the customs fees if your product gets inspected.
As much as we would love for the imported product to come in ready to ship out or sell; that is usually is not the case. When unloading the container; you can do this a few ways. We palletize all the products separately or can unload the products according to outbound orders. This really depends on if the product is being warehoused or cross docked and shipped directly to a customer or distribution center. At this stage, its a great time to do any co-packing, display building, or last minute stickering.
Supply Chain Management
We prepare freight for the top retailers and distribution centers in Canada; we work directly and indirectly with these clients. Working directly on site at distribution centers for customers like Walmart, Costco, Amazon, Home Depot, and Hudsons Bay to name a few. We prepare the inbound freight on site to reduce receiving time and fees. We also work indirectly; by working with vendors of these retailers to prepare their shipments at vendors warehouse before transporting to these top retailers.
When preparing freight for retailers like this; you need to be very careful that the pallets and purchase orders meet the retailers internal specifications. Failing to comply with these requirements; your shipment can be fined by the distribution center. Retailers can reject your shipment and reschedule your delivery appointment for when the freight is prepared correctly. Fines range from $1000 to 10% of the purchase order and increase with non-compliance. Take a look at our Driver Assist Loads page to get an idea of the fines that these distribution centers charge.
Pro Tip: Really plan this step out, you can waste a lot of time and money by handing each carton or product multiple times due to lack of planning.
So you need some warehouse space? Expect 3PLs (Third Party Logistics) to charge you a storage fee in the range of $10-$15 per month per pallet; this gets more expensive if the product cannot be stacked or racked. Customers pay a handling fee in, a handling fee out when your product is received and shipped out.
Container Solutions has a main warehouse used for cross docking, and warehousing products in Brampton, ON. We also have assets in other provinces across Canada. If you are only targeting specific Provinces; you should warehouse you products in these areas to reduce final mile transportation costs.
Pro Tip: Have product specifications, pallet dimensions, total pallet quantities, when talking to warehouses about storage; this is the information they will need when providing you a quote.
Distribution and Transportation
Alright, so we have your product imported, the freight has been transported to the warehouse, the container is unloaded, the product has been prepared on pallets. Now you need to think about how you want to ship your product. This can be done a few ways. We can ship to your customers distribution centers where they are going to distribute it to their stores. It can also be shipped directly to the store level. Finally, it can also be shipped file mile to your consumer if you have any online sales.
Some things to consider. Are you shipping full pallets or individual cartons? If shipping pallets; are you shipping FTL (Full Truck Loads) or LTL (Less than Truck Loads)? If shipping cartons, or sometimes called “Pick and Pack”; then you will need to find some couriers to ship a bunch of cartons.
Transportation and courier companies have prominent location or geographical area in which they offer the best service. If you plan on nation wide distribution and transportation; you will need to set up agreements with multiple vendors to offer a quality distribution nationwide. We have assets and agreements with most transportation companies to offer the most reliable distribution services. Distribute with us and get our great rates plus you only have to deal with 1 vendor.
Pro Tip: Have a detailed list of the address you will be shipping freight; so you can get an accurate quote.
Supply Chain Management
Managing your freight can be a overwhelming task if trying to start from scratch or manage it internally. Most manufacturers and vendors, hire a freight management company like us to import, transport, unload containers, prepare freight, warehouse products, and distribute their shipments and purchase orders. We works with distribution centers in variety of channels, we have the assets in place to get the freight delivered, prepared correctly, in a cost effective and efficient manner.
Container Solutions has a variety of assets in Customs Brokering, Transportation, Container Unloading, Freight Management, Warehousing, and Distribution. We can be an “all in one” solution provider or you can select from a bunch of service options that suits your business needs. Contact us today and tell us about your project; we would love to help.
We hope this article help you understand the scope of freight management and supply chain. If you found it interesting; give it a share to help someone else.