Northern Tier Advantage

Importers of consumer products are currently faced with the multifaceted logistical challenge of reducing inventory costs while improving supply chain optimization. To effectively meet the pricing and service demands of major retailers in today’s market, importers need to investigate Improving Supply Chain Strategy and Efficiency via the The Northern Tier Advantage [1] and Dual Point Distribution.

Supply Chain Congestion in Southwestern Ports

In a recent trend which continued through 2005, 35% of all imported cargo (measured in dollar value) entered the U.S. via Southern California ports. This created congestion resulting in associated delays while unloading cargo from vessels, transporting cargo from piers and integration into the supply chain. The sheer volume of imports exacerbated by labor and space issues was determined to be the primary cause of these delays. However, studies now indicate that lack of necessary investment in transportation infrastructure coupled with the use of the increasingly (30%) larger vessels, present a bleak picture for performance improvement any time in the near future. What is the impact of this trend on current supply chain strategy and efficiency? Importers routinely utilizing Southern California ports currently plan for an eight to ten day time lag from cargo arrival to order fulfillment.

Supply Chain Optimization in Northwestern Ports

In contrast the Pacific Northwest Ports of Seattle and Tacoma, with the same or better transit times from the Orient, have not experienced similar congestion and delays in supply chain efficiency despite an estimated 17% growth during the same period. Moreover, existing investment in Pacific Northwest Ports and transportation infrastructure will allow for burgeoning growth annually without appreciable impact on performance criteria. Importers utilizing Pacific Northwest Ports routinely plan for a five-day window from cargo arrival to order fulfillment. This shortened order-fulfillment time leads to increased inventory turns, reduced inventory carrying costs and quicker invoicing. This translates to improved cash to cash cycle times, enhanced customer service, and greater satisfaction in the pricing and service demands of major retailers. In addition, the Port of Seattle Research Department published a study, The Northern Tier Advantage,[1] that compares transit times from the Pacific Northwest and Southern California, via OTR/Full Truck and Rail Intermodal service, to major retail DC locations nationally. This study clearly illustrates a 48-hour transit time advantage from the Pacific Northwest for both truck and rail to the heavily populated upper Midwest and Eastern Seaboard areas. Although expedience is clearly a factor, another component that is integral to improved supply chain efficiency is proximity to market. In response to both of these parameters, Norvanco has established a second order fulfillment center in the Chicago area in addition to the headquarters facility located in the Pacific Northwest. The implementation of this dual point distribution network has positioned Norvanco to efficiently provide one to two day delivery service to importers in the Pacific Northwest and Western U.S. as well as consumers and retailers based in the Midwest and East Coast regions. In summary, the creation of Norvanco’s dual point distribution network has effectively reduced delivery time and decreased transportation costs for consumers throughout the U.S., resulting in an overall increase in customer satisfaction. Norvanco International is a full-service logistics company with offices in the Pacific Northwest and Midwest that provide the gateway for importers, exporters and domestic manufacturers. Norvanco specializes in direct, rapid distribution to mass merchandisers, retailers and consumers throughout the U.S. Since its inception in 1976, Norvanco has experienced steady growth and great success in providing global logistics solutions to a diverse customer base.