How providers are addressing these and other challenges to support critical industries
Energy, construction, and manufacturing are just a few industries that often require Project Cargo, the handling and transportation of heavy and complex equipment, including parts that have unique dimensions, like a turbine for a windmill.
Managing Project Cargo logistics requires well-planned and executed strategies, in the best of times. However, several current factors outside the customer’s or their logistics provider’s control are adding even greater complexity to Project Cargo today. Like many aspects of supply chain management, Project Cargo providers are experiencing issues due to the economy, global unrest, and aging infrastructure.
Economic Challenges
Rising costs are a primary factor impacting Project Cargo logistics. According to Frank Rodriguez, Global Projects Manager for Omni Logistics, “The global economy has experienced a surge in inflation, leading to increased costs for transportation, fuel and labor. This can impact project budgets and timelines.”
Opening or expanding a new facility or closing a manufacturing plant typically requires not only a complex logistics plan but, in many cases, a significant capital investment. Cost overruns can sometimes occur simply because of economic factors, regardless of how well the project logistics are planned.
Global Instability
Geopolitical unrest is another factor impacting Project Cargo today. “Unrest in certain regions can pose security risks, disrupt transportation routes, and increase insurance premiums,” Rodriguez said. “The current situation in the Red Sea/Suez Canal route is a major disruption to multiple key trade routes.”
Trade wars and tariffs are also adding to the complexity. “Disputes between nations can result in tariffs and trade restrictions, complicating the movement of Project Cargo across borders,” Rodriguez noted.
The United States presidential election is another unknown that could impact the economy and trade relations.
Aging Infrastructure
Infrastructure continues to pose challenges for all logistics providers, especially those handling Project Cargo. Many ports, roads, and railways are aging and may need to be equipped to handle oversized and overweight shipments.
Congestion and capacity constraints are also getting worse, not better, according to Rodriguez. “Increased trade volumes and limited infrastructure can lead to congestion at transportation hubs, causing delays and additional costs.” Even in the best of circumstances, managing Project Cargo can be challenging beginning with transportation. “These shipments often require specialized routes and permits due to their size, weight, or hazardous nature. This can involve coordination with multiple authorities, transportation providers, and infrastructure owners,” Rodriguez noted.
Transporting Project Cargo often requires specialized equipment such as heavy-duty cranes, flatbed trailers, or specialized vehicles. Sourcing and coordinating the use of this equipment can be challenging.
Maintaining compliance with diverse domestic and international regulations adds another level of complexity, requiring a thorough understanding of each region’s legal and safety requirements. As with any logistics initiative, effective communication is critical, especially when dealing with multiple stakeholders.
According to Kyosuke Noguchi, Senior Vice President & General Manager of the International Freight Forwarding Group of Yusen Logistics (Americas) Inc., Project Cargo for governmental entities has its own set of unique characteristics.
“These projects tend to be highly sensitive and often include anonymity during the entire shipping process,” said Noguchi. “The need for increased security, special packaging, the ability to load freight last and discharge it first and avoiding adversary countries are all part of managing freight for governments.”
The energy industry also poses unique challenges, according to Daniel Wieland, SVP of Global Projects & Industry Solutions, Schenker AG.
“Energy is a huge industry sector that includes fossil fuels, renewable energies, so-called clean techs, like hydrogen, and many other sub-sectors,” Wieland said. “Looking at an LNG plant or solar farm or an offshore wind energy park —naming only these three examples indicates how complex this can be.”
How are industries like energy and manufacturing and their partners, providers like Omni Logistics and Yusen Logistics, dealing with the routine and current challenges in managing Project Cargo logistics? The best strategies involve the use of advanced technology, careful risk assessment and mitigation plans, and strategic partnerships.
Advanced Technology
Advanced technology plays an important role in driving efficiency in all aspects of supply chain management and is crucial in managing Project Cargo. Most providers leverage advanced technology such as digital platforms and data analytics to optimize transportation routes, and track shipments in real-time, such as digital platforms and data analytics to optimize transportation routes and track shipments.
Supply chain technologies, like AI-enabled Transportation Management Solutions (TMS), can process volumes of data quickly and provide actionable information for users. Today’s best-in-class tech tools offer streamlined implementation, user-friendly platforms, and cost-effective options.
Cloud-native systems are typically less expensive because they do not require extensive IT staff or infrastructure. The creation of integration tools makes it possible for multiple, diverse systems to communicate with each other providing a 360 view of every transaction. Real-time visibility throughout the shipment process is a goal for many supply chain managers, and it is definitely ideal when managing Project Cargo.
Risk Assessment and Mitigation
Since the pandemic, most supply chain managers have focused on strengthening their resilience. “We conduct thorough risk assessments to identify potential challenges and develop strategies to mitigate them, such as contingency planning, insurance coverage, and alternative transportation routes,” said Rodriguez.
Strategic Partnerships
Strategic partnerships are an important element in supply chain management, especially Project Cargo logistics. Choosing a logistics partner with expertise and contacts within the global trading community is a good first step, according to Noguchi. He said, “Our team’s expertise in managing large-scale projects ensures tailored solutions that align with specific project requirements.”
As with many aspects of life, who a person knows can be as important as what they know. To that end, Omni Logistics maintains strong relationships with a global network of transportation providers, including shipping lines, airlines, and trucking companies. These partnerships allow Omni to “secure reliable capacity and competitive rates,” according to Rodriguez.
A final factor that is critical to the success of all logistics efforts, including Project Cargo is communication. “With the many shareholders involved throughout the process, communications is a priority,” Noguchi said.
Maintaining clear communications is the best way to create a shared view of expectations, address any disruptions, and deliver successful outcomes, regardless of any headwinds or mitigating circumstances.
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