The need for efficient procurement of essential supplies to expedite port calls has become an increasing pressure point for vessel operators amid port congestion triggered by the resurgence of world trade in the wake of the Covid-19 pandemic, according to Inchcape Shipping Services.
Logistics and procurement of spare parts, provisions, consumables, bunker fuel and other supplies play a vital role in keeping trade flowing and ships on track to ensure that contractual voyage commitments in relation to time and cost are met.
But Inchcape’s Head of Global Marine Supply Chain, Robbie Mclellan, says: “Ship owners and managers are facing logistical challenges with rising costs of procurement and delivery, supply bottlenecks, a lack of capacity to handle increased workload, and a lack of visibility and transparency that have affected port turnaround times.”
He also points out that many smaller shipping companies do not have the manpower and resources to carry out internal procurement in a fast and cost-efficient manner and would benefit from leveraging Inchcape’s global supply chain.
Buying power for lower prices
Consequently, Inchcape has seen increasing requests from clients to meet their logistics and procurement needs, in addition to provision of port agency services, and has therefore launched a dedicated Marine Supply Chain Solutions (MSCS) service with a newly opened warehouse in the shipping hub of Singapore to serve the global market.
“This brings to the market a strong value proposition as we are able to leverage the scale and expertise of Inchcape’s global network to carry out procurement based on our existing strong relationships with approved local vendors at hundreds of ports in 60 countries,” Mclellan says.
The MSCS team manages the entire supply chain process from procurement of items to last-mile onboard delivery as part of a bespoke solution for ship owners and managers, as well as wind farms, shipyards and other businesses.
Mclellan explains that Inchcape’s global reach and extensive customer base give it “huge buying power” with its vast vendor network to gain access to better prices in multiple locations around the world.
“Typically, shipowners have limited negotiation power on their own to secure lower prices and do not have local boots on the ground with the necessary vendor relationships,” he says.
‘If you want it, we can get it’
Furthermore, all of Inchcape’s vendors are verified on an annual basis for compliance with international QHSSE standards and anti-corruption regulations, while the company adheres to the CIPS Code of Ethical Procurement and promotes sustainable practices throughout its supply chain with regular performance reviews and reporting.
The global reach of MSCS has rapidly expanded beyond major ports like Singapore and Rotterdam to cover locations in more remote parts of the world where Inchcape already has a port agency presence.
“If you want it, we can get it where you need it,” Mclellan says, with MSCS arranging ‘door-to-deck’ delivery of items such as spare parts and provisions as well as bunker fuel and lube oil, in addition to providing chandling solutions.
The scope of the service also extends to freight forwarding whereby Inchcape, acting as an intermediary, coordinates worldwide deliveries of diverse shipments by working together with its logistics partners to give favourable fixed freight rates for exporters.
Singapore warehouse a storage hub
The Singapore storage facility covers an area of 10,000 square feet and is equipped with a 500-tonne capacity crane. The warehouse is able to handle inventories of up to 250 tonnes, while there is also a smaller transit warehouse at the port itself.
This is part of Inchcape’s global HUBS network of warehouses spanning North America, mainland Europe, the Middle East and Asia that is run together with partners and coordinated from the MSCS control tower in Mumbai, India.
The MSCS team recently handled its largest freight move to date with a 350-tonne shipment from Japan to Singapore of a high-value and sizeable cargo that carried significant risk, demonstrating its credentials in heavy-lift freight forwarding, according to Logistics Manager Nathan Silvester, who is responsible for the Singapore facility.
Another weighty task for Inchcape was being entrusted by a leading global brand with procurement of IT equipment, mainly racking and servers, for shipment on as many as 170 vessels to far-flung destinations across the globe.
Freight forwarding tax benefit
“Located at the heart of the East-West trade routes, Singapore is the busiest port in the world in terms of ship tonnage with an average of 140,000 vessels calling at the port annually and two every minute, of which Inchcape handles a large number. This makes it an important strategic location for freight forwarding,” Silvester says.
“The port offers customs flexibility on transshipments to other countries in the Asian region such as Thailand and Indonesia within a tax-free zone, which results in cheaper freight forwarding.
“Singapore is also an ideal location for supply of spares, provisions and bunkers, which was the rationale behind our decision to establish a range of in-house logistics solutions tailored to the needs of our stakeholders.”
Silvester says spare parts are typically sourced from China, Japan, South Korea and certain parts of Europe, where main engines are made, for distribution to the destination port as required by the client, a process that would usually entail communication at different levels with multiple parties and additional procurement costs for each link in the chain.
Streamlined procurement process
“We are able to streamline that process by providing a single point of contact for the vessel operators and having a single digital channel of communication through our global offices, which means we can control the cost factor,” he explains.
MSCS is able to ensure full visibility and transparency in the procurement process, also with a single point of remittance for payments that are invoiced separately to the port agency disbursement accounts, thereby avoiding multiple invoices from different parties. There are also detailed port costs, including first and last-mile delivery charges, as part of a transparent pricing model.
While MSCS is a separate service, Inchcape’s port agency clients can benefit from synergies on procurement given its local teams on the ground are constantly handling changes in voyage schedules and are therefore able to coordinate vessel supplies effectively, according to Mclellan.
“Cost-efficient port turnarounds are critically dependent on local expertise and voyage intelligence, together with effective communication and vendor collaboration, to avoid unnecessary costs and keep the wheels of supply chain logistics running smoothly,” he concludes.