Executive Briefings

Controlling Global Freight Costs: The Next Wave of Savings

Shippers who used to beat up carriers on rates are learning that there are a lot more effective ways to cut the cost of moving goods around the world.

For most global shippers, saving money on freight has always meant one thing: squeezing carriers for the best possible rate. And when times get tough, the pressure to score more discounts only gets greater.

The way most companies are set up, freight bookers have no choice but to deliver on relentless calls by top management for additional cost savings. Too often, transportation is treated solely as a cost center, and the role of logistics in bettering customer service or driving efficiencies across the organization is all but ignored. But a combination of factors - a sagging economy, new information technology and the globalization of trade - has shippers starting to realize just how much money they've been leaving on the table all these years.

The fact is, traders are flush with opportunities to cut freight costs in ways other than lowering rates. But they'll never do it, experts say, without a fresh way of looking at logistics and its impact on the supply chain.

It begins with viewing all of the elements that go into a global shipment, not just the rate. "We see the next wave of savings as coming from productivity gains, treating transportation and logistics in the context of the broader supply chain," says consultant Randy Garber, vice president of A.T. Kearney Inc.'s Operations Services Practice in Costa Mesa, Calif.

There are rich opportunities in warehousing, he says. Often companies can eliminate a whole echelon of distribution by moving away from product storage to a flow-through model, based on better information conveyed electronically. Savings of between 40 and 60 percent are not uncommon.

A combination of reduced cycle times, new purchasing terms and IT tools for shipment tracking and product demand can further slash inventory costs by 20 to 50 percent, Garber says. On the equipment side, better inventory visibility can take 20 to 30 percent out of railcar costs for rail shippers.

What to address first? There's no automatic answer for everyone, says Garber. But any solution must be accompanied by some measure of business process reengineering.
"You're not going to accomplish savings within traditional logistics silos," Garber says. Even the slickest software package or internet tool is inadequate without process changes that allow for the flow of data across separate disciplines like accounting, production, procurement, logistics, sales and marketing.

One area given short shrift by managers who are focused solely on freight rates is the complex world of tariffs and duties. At a time when trade treaties are erasing borders between nations, just knowing where to clear customs for regional distribution can result in huge savings, says Lisa Hebert, associate partner with the Accenture consultancy in San Francisco. Retail, electronics and high-tech producers are also prime candidates for such underutilized tools as foreign trade zones and duty drawback.

Looking at Landed Cost
Of particular value to global shippers is the landed-cost engine, an automated database containing all of the costs involved in bringing product into a given country, including tariffs, duties, sales taxes and special treatment under trade preference agreements. It's a concept that relatively few shippers seem to grasp.

Historically, says Hebert, import costs were folded into total procurement expense, and not seen as a logistics or supply-chain issue. Sellers simply recovered them in the purchase price. But today, increased competition and low margins demand that shippers strip out every bit of cost imaginable. And the value of knowing one's total import cost is considerable.

A whole new category of software provider has emerged to meet the task. It's supposed to be the responsibility of freight forwarders, says Hebert, but their usefulness in that regard depends on whether they're being paid for it. Many continue to subsist on commissions or transaction fees that don't cover the expense of maintaining a landed-cost database.

A truly effective landed-cost engine must contain detailed information on country of origin, says Darren Maynard, chief operating officer of Rockville, Md.-based NextLinx Corp. The proliferation of trade pacts such as the North American Free Trade Agreement (NAFTA) offers shippers the chance to avoid duties altogether - as long as their products are sourced within the right region. Maynard quotes estimates that some $6bn in refundable duties lie unclaimed in the U.S. alone.

Other factors to consider in the landed-cost calculation include antidumping penalties and countervailing duties, which can shut errant shippers out of markets altogether. And sales taxes can vary widely within a single country.

NextLinx stores landed-cost data on 116 countries, with more than 500 contributors around the world keeping it current. Customers include major integrated carriers such as FedEx and United Parcel Service, third-parties such as Expeditors International, and Fortune 500 shippers.

 

 

 

 

 

"In the vast majority of cases, there's no linkage between what people say they're getting in procurement savings and what they actually get."
- Joe Wagner of Logistics.com

 


 

 

 


On the retail side, says Maynard, the goal is to make landed-cost data instantly available to customers at the time they order over the internet or by catalog. That reduces the number of nasty surprises that consumers encounter at the check-out point of many e-tailers' web sites.
Dulles, Va.-based Vastera is another early entrant into the field of international trade logistics (ITL) software, including landed-cost calculation. Most of its business comes from the sale or hosting of software, but the portion related to managed services for big customers is growing, says vice president of marketing Greg Stock.

Freight management outsourcing becomes more attractive as shippers expand sales and production into multiple countries, then must cope with a tangle of rules and regulations, Stock says. Vastera's managed-services contract with Lucent Technologies is valued at $25m over three years, according to AMR Research Inc. Tasks under the agreement include import/export management, trade compliance and product classification.

A comprehensive landed-cost engine does more than tell the global shipper which country to use as a gateway to a larger region. Its ramifications echo throughout the entire supply chain, says Ian Williams, vice president of marketing with Santa Clara, Calif.-based Xporta. Companies may use the database to determine where to locate plants, distribution centers and suppliers, and which of them to draw from in response to a given situation. They can even select which raw materials go into finished products such as athletic shoes, based on production cost at the source, and trade preferences in destination countries.

On a day-to-day level, the tool helps users to harmonize product classifications and descriptions in accordance with the international Harmonized System. Users of the Xporta software, Williams says, need only enter the product's generic name to obtain the proper code.

Xporta's landed-cost product is the heart of a web-based tool that calculates international shipping costs, marketed by Lenexa, Kan.-based Freightquote.com. Aimed primarily at small and medium-sized companies, it provides better rates and optimizes modal choices, says Freightquote chief executive officer Tim Barton. Currently it covers all modes within North America, and air carriers beyond the continent.

Freight savings run between 5 percent and 40 percent, with the extra advantage of faster transit times, Barton says. At the same time, he urges shippers to look beyond basic rates to the number of times a transaction is touched, and how many processes can be eliminated through streamlined management.

Promise vs. Performance

Shippers can gain dramatically through the more intelligent use of modes and carriers, says Accenture's Hebert. They may be well acquainted with the practice of balancing road with rail, and ocean with air. But their comparisons are generally lacking in sophistication.

For example, if a ship carrying critical goods is sailing late, the shipper, forwarder or third-party is likely to expedite the entire shipment. Most lack the analytical tools to determine precisely how much of the shipment must be diverted to an expensive air carrier, and how much can move later.

Shippers often can't compare carriers' promises on rates with what is actually charged. A carrier might bid low just to get the business, then refuse shipments or charge higher rates at the moment of booking.

Among those software vendors seeking to fuse the two ends of the supply chain is Burlington, Mass.-based Logistics.com.

It begins with carrier procurement, says Joe Wagner, senior vice president of global sales and marketing. Most logistics costs get locked in at an early stage, when the shipper builds its carrier base and plots long-term routing strategy. Logistics.com, along with a handful of other vendors, is working to allow users to purchase transportation of all modes, on a global basis, through one unified function. (Currently its service is limited to global shippers based in North America.) In the process, it can help them to make better tradeoffs between cost and transit time.

The initial network design must take into account the shipper's long-range plans for siting distribution centers and vendors. Logistics.com helps to benchmark against past decisions, drawing from a large database of procurement histories. Its OptiBid software then allows for online carrier selection.

On the management side, the vendor's OptiManage module tracks carrier performance, to ensure that shippers are getting the promised deal. "In the vast majority of cases," says Wagner, "there's no linkage between what people say they're getting in procurement savings and what they actually get."

Logistics.com gets its landed-cost data from NextLinx. In fact, partnering is common among vendors offering a complete package of transportation planning and execution tools, including automated documentation, freight costing, carrier selection and shipment tracking. Atlanta-based Logility designed its product with an emphasis on North America. Then it brought in Precision Software Ltd., an Irish company with U.S. headquarters in Chicago, to provide the global component. "No one addresses both domestic and international issues in their own product," says Bill Pritz, vice president of Logility's Transportation Group.

A Single Solution?

Even so, the notion of one transportation management system (TMS) to handle both domestic and international freight is becoming more attractive, says Debi Gann, Precision's executive sales manager for the U.S. The events of Sept. 11 have awakened nominally domestic shippers to the need for vigilance and improved trade compliance, she says. And an ever-shrinking number of manufacturers are shipping product that consists entirely of locally made components.

Savings opportunities depend on the size of the company, says Pritz. Small and medium-sized customers, some of which have never had stand-alone transportation departments, can reap big benefits from a first-time TMS. Larger and more experienced shippers seek more elusive savings, in areas such as better load building and consolidation, carrier and mode selection, and freight auditing.

Public and private exchanges, through which shippers can tender loads to a select group of carriers, can also result in dramatic cost reductions. Such tools are especially attractive, says Gann, because they involve concrete applications with a measurable, fast return on investment. Companies are growing increasingly wary of massive implementation projects, such as enterprise resource planning (ERP) systems, that soak up valuable resources without delivering bottom-line savings.

John Urban, president of Alameda, Calif.-based GT Nexus, believes large shippers can save millions of dollars a year through better transportation management. The key, he says, lies in matching planning assumptions with what's really going on.

Many manufacturers, for example, blindly push product out the door, even if buyers' inventories are sufficient to meet current needs. The oversight can result in returned product or an unwanted burden on the company's books. Moreover, shippers tend to leave unchallenged their pre-ordained rules about what moves by ocean and air. They cannot make on-the-spot modal tradeoffs that might violate conventional wisdom, yet yield significant short-term benefits.

Even greater savings can come from extending automation and new software into the order-management sphere. GT Nexus offers order visibility from the time a purchase order is issued to the moment product reaches store shelves, Urban says. It also helps users to select carriers based on service level, peak season, and space commitments, among other factors. Up to now, he says, such information was included only in spreadsheets which could not easily be shared with multiple carriers or divisions of a shipper.

Some software vendors are taking a more focused approach to carrier management. Cambridge, Mass.-based Celarix touts Rate Explorer, a tariff and contract-management tool designed for ocean transport. It was built in response to partial deregulation of the ocean-shipping business, allowing for confidential service contracts and eliminating most public tariff filings.

Ocean freight rate negotiation can be an arduous task, involving multiple carriers and thousands of pages of detail on commodities, equipment, service features and surcharges. Rate Explorer puts those elements into a database, then utilizes a search engine to access contract terms for a given move. The shipper can choose from the option that yields the best possible rate, says John Preuninger, executive vice president and general manager of Celarix.

Document accuracy is a key concern. Two recent studies of large global carriers uncovered an average error rate of 22 percent in bills of lading, says Preuninger. The average amount of the error was $180, skewed 60 percent in the carriers' favor.

The Third-Party Dilemma

Third-party logistics (3PL) providers need new solutions for freight-cost management as much as shippers do - and maybe more. Increasingly, their role as go-between hangs on their ability to maximize service while minimizing cost. In the devilishly complex world of international shipping, that means finding a tool that can relay real-time information to sales staff, convert it to a booking, and provide tracking and tracing, all on the same platform.

Yellow Global, a 3PL with headquarters in Overland Park, Kan., developed such a capability in-house when it failed to find one on the open market, says Jim Ritchie, president and chief executive officer. The result was Global QBT (for quote, book and trade), which gives users the ability to go online, input key data on a shipment, and within seconds get a rate. The shipper continues to receive updates on the carrier's offer until it books the shipment. Yellow's system also includes a TMS module that keeps tight rein on carrier performance, Ritchie says.

He says the greatest source of savings on freight today lies in network design, where shippers can match their web of warehouses with actual customer need. Often that leads to a sharp reduction in distribution points and general overhead.

Shippers have yet to tap into the full resources of 3PLs in their search for savings, says Roger Haeussler, president of the international division of Exel Logistics in Hayward, Calif. Only around 10 percent of Exel's customers use its landed-cost calculator (acquired mostly from NextLinx) and other analytical tools. Many prefer to do the job themselves. But Haeussler sees a growing dependence on 3PLs for that service, as shippers shed themselves of tasks that aren't thought to be within their core competencies.

They're also looking at cost-cutting measures such as shipment consolidation at origin, movement by air in bulk, and breaking out of smaller shipments after customs clearance - a setup that's ideal for multi-customer 3PLs. Along with a cross-dock operation that minimizes standing inventory, shippers can realize freight savings of roughly 20 percent, Haeussler says.

Experts caution against looking for all freight-management tools in a single place. They also urge shippers not to underestimate the many challenges of international transport. When a company goes global, its domestic freight experts usually aren't equipped to do the job, says Hebert. "Shippers will lose if they think it's a viral effect," she warns. "They have to invest energy, time and dollars into managing global supply chains."

For most global shippers, saving money on freight has always meant one thing: squeezing carriers for the best possible rate. And when times get tough, the pressure to score more discounts only gets greater.

The way most companies are set up, freight bookers have no choice but to deliver on relentless calls by top management for additional cost savings. Too often, transportation is treated solely as a cost center, and the role of logistics in bettering customer service or driving efficiencies across the organization is all but ignored. But a combination of factors - a sagging economy, new information technology and the globalization of trade - has shippers starting to realize just how much money they've been leaving on the table all these years.

The fact is, traders are flush with opportunities to cut freight costs in ways other than lowering rates. But they'll never do it, experts say, without a fresh way of looking at logistics and its impact on the supply chain.

It begins with viewing all of the elements that go into a global shipment, not just the rate. "We see the next wave of savings as coming from productivity gains, treating transportation and logistics in the context of the broader supply chain," says consultant Randy Garber, vice president of A.T. Kearney Inc.'s Operations Services Practice in Costa Mesa, Calif.

There are rich opportunities in warehousing, he says. Often companies can eliminate a whole echelon of distribution by moving away from product storage to a flow-through model, based on better information conveyed electronically. Savings of between 40 and 60 percent are not uncommon.

A combination of reduced cycle times, new purchasing terms and IT tools for shipment tracking and product demand can further slash inventory costs by 20 to 50 percent, Garber says. On the equipment side, better inventory visibility can take 20 to 30 percent out of railcar costs for rail shippers.

What to address first? There's no automatic answer for everyone, says Garber. But any solution must be accompanied by some measure of business process reengineering.
"You're not going to accomplish savings within traditional logistics silos," Garber says. Even the slickest software package or internet tool is inadequate without process changes that allow for the flow of data across separate disciplines like accounting, production, procurement, logistics, sales and marketing.

One area given short shrift by managers who are focused solely on freight rates is the complex world of tariffs and duties. At a time when trade treaties are erasing borders between nations, just knowing where to clear customs for regional distribution can result in huge savings, says Lisa Hebert, associate partner with the Accenture consultancy in San Francisco. Retail, electronics and high-tech producers are also prime candidates for such underutilized tools as foreign trade zones and duty drawback.

Looking at Landed Cost
Of particular value to global shippers is the landed-cost engine, an automated database containing all of the costs involved in bringing product into a given country, including tariffs, duties, sales taxes and special treatment under trade preference agreements. It's a concept that relatively few shippers seem to grasp.

Historically, says Hebert, import costs were folded into total procurement expense, and not seen as a logistics or supply-chain issue. Sellers simply recovered them in the purchase price. But today, increased competition and low margins demand that shippers strip out every bit of cost imaginable. And the value of knowing one's total import cost is considerable.

A whole new category of software provider has emerged to meet the task. It's supposed to be the responsibility of freight forwarders, says Hebert, but their usefulness in that regard depends on whether they're being paid for it. Many continue to subsist on commissions or transaction fees that don't cover the expense of maintaining a landed-cost database.

A truly effective landed-cost engine must contain detailed information on country of origin, says Darren Maynard, chief operating officer of Rockville, Md.-based NextLinx Corp. The proliferation of trade pacts such as the North American Free Trade Agreement (NAFTA) offers shippers the chance to avoid duties altogether - as long as their products are sourced within the right region. Maynard quotes estimates that some $6bn in refundable duties lie unclaimed in the U.S. alone.

Other factors to consider in the landed-cost calculation include antidumping penalties and countervailing duties, which can shut errant shippers out of markets altogether. And sales taxes can vary widely within a single country.

NextLinx stores landed-cost data on 116 countries, with more than 500 contributors around the world keeping it current. Customers include major integrated carriers such as FedEx and United Parcel Service, third-parties such as Expeditors International, and Fortune 500 shippers.

 

 

 

 

 

"In the vast majority of cases, there's no linkage between what people say they're getting in procurement savings and what they actually get."
- Joe Wagner of Logistics.com

 


 

 

 


On the retail side, says Maynard, the goal is to make landed-cost data instantly available to customers at the time they order over the internet or by catalog. That reduces the number of nasty surprises that consumers encounter at the check-out point of many e-tailers' web sites.
Dulles, Va.-based Vastera is another early entrant into the field of international trade logistics (ITL) software, including landed-cost calculation. Most of its business comes from the sale or hosting of software, but the portion related to managed services for big customers is growing, says vice president of marketing Greg Stock.

Freight management outsourcing becomes more attractive as shippers expand sales and production into multiple countries, then must cope with a tangle of rules and regulations, Stock says. Vastera's managed-services contract with Lucent Technologies is valued at $25m over three years, according to AMR Research Inc. Tasks under the agreement include import/export management, trade compliance and product classification.

A comprehensive landed-cost engine does more than tell the global shipper which country to use as a gateway to a larger region. Its ramifications echo throughout the entire supply chain, says Ian Williams, vice president of marketing with Santa Clara, Calif.-based Xporta. Companies may use the database to determine where to locate plants, distribution centers and suppliers, and which of them to draw from in response to a given situation. They can even select which raw materials go into finished products such as athletic shoes, based on production cost at the source, and trade preferences in destination countries.

On a day-to-day level, the tool helps users to harmonize product classifications and descriptions in accordance with the international Harmonized System. Users of the Xporta software, Williams says, need only enter the product's generic name to obtain the proper code.

Xporta's landed-cost product is the heart of a web-based tool that calculates international shipping costs, marketed by Lenexa, Kan.-based Freightquote.com. Aimed primarily at small and medium-sized companies, it provides better rates and optimizes modal choices, says Freightquote chief executive officer Tim Barton. Currently it covers all modes within North America, and air carriers beyond the continent.

Freight savings run between 5 percent and 40 percent, with the extra advantage of faster transit times, Barton says. At the same time, he urges shippers to look beyond basic rates to the number of times a transaction is touched, and how many processes can be eliminated through streamlined management.

Promise vs. Performance

Shippers can gain dramatically through the more intelligent use of modes and carriers, says Accenture's Hebert. They may be well acquainted with the practice of balancing road with rail, and ocean with air. But their comparisons are generally lacking in sophistication.

For example, if a ship carrying critical goods is sailing late, the shipper, forwarder or third-party is likely to expedite the entire shipment. Most lack the analytical tools to determine precisely how much of the shipment must be diverted to an expensive air carrier, and how much can move later.

Shippers often can't compare carriers' promises on rates with what is actually charged. A carrier might bid low just to get the business, then refuse shipments or charge higher rates at the moment of booking.

Among those software vendors seeking to fuse the two ends of the supply chain is Burlington, Mass.-based Logistics.com.

It begins with carrier procurement, says Joe Wagner, senior vice president of global sales and marketing. Most logistics costs get locked in at an early stage, when the shipper builds its carrier base and plots long-term routing strategy. Logistics.com, along with a handful of other vendors, is working to allow users to purchase transportation of all modes, on a global basis, through one unified function. (Currently its service is limited to global shippers based in North America.) In the process, it can help them to make better tradeoffs between cost and transit time.

The initial network design must take into account the shipper's long-range plans for siting distribution centers and vendors. Logistics.com helps to benchmark against past decisions, drawing from a large database of procurement histories. Its OptiBid software then allows for online carrier selection.

On the management side, the vendor's OptiManage module tracks carrier performance, to ensure that shippers are getting the promised deal. "In the vast majority of cases," says Wagner, "there's no linkage between what people say they're getting in procurement savings and what they actually get."

Logistics.com gets its landed-cost data from NextLinx. In fact, partnering is common among vendors offering a complete package of transportation planning and execution tools, including automated documentation, freight costing, carrier selection and shipment tracking. Atlanta-based Logility designed its product with an emphasis on North America. Then it brought in Precision Software Ltd., an Irish company with U.S. headquarters in Chicago, to provide the global component. "No one addresses both domestic and international issues in their own product," says Bill Pritz, vice president of Logility's Transportation Group.

A Single Solution?

Even so, the notion of one transportation management system (TMS) to handle both domestic and international freight is becoming more attractive, says Debi Gann, Precision's executive sales manager for the U.S. The events of Sept. 11 have awakened nominally domestic shippers to the need for vigilance and improved trade compliance, she says. And an ever-shrinking number of manufacturers are shipping product that consists entirely of locally made components.

Savings opportunities depend on the size of the company, says Pritz. Small and medium-sized customers, some of which have never had stand-alone transportation departments, can reap big benefits from a first-time TMS. Larger and more experienced shippers seek more elusive savings, in areas such as better load building and consolidation, carrier and mode selection, and freight auditing.

Public and private exchanges, through which shippers can tender loads to a select group of carriers, can also result in dramatic cost reductions. Such tools are especially attractive, says Gann, because they involve concrete applications with a measurable, fast return on investment. Companies are growing increasingly wary of massive implementation projects, such as enterprise resource planning (ERP) systems, that soak up valuable resources without delivering bottom-line savings.

John Urban, president of Alameda, Calif.-based GT Nexus, believes large shippers can save millions of dollars a year through better transportation management. The key, he says, lies in matching planning assumptions with what's really going on.

Many manufacturers, for example, blindly push product out the door, even if buyers' inventories are sufficient to meet current needs. The oversight can result in returned product or an unwanted burden on the company's books. Moreover, shippers tend to leave unchallenged their pre-ordained rules about what moves by ocean and air. They cannot make on-the-spot modal tradeoffs that might violate conventional wisdom, yet yield significant short-term benefits.

Even greater savings can come from extending automation and new software into the order-management sphere. GT Nexus offers order visibility from the time a purchase order is issued to the moment product reaches store shelves, Urban says. It also helps users to select carriers based on service level, peak season, and space commitments, among other factors. Up to now, he says, such information was included only in spreadsheets which could not easily be shared with multiple carriers or divisions of a shipper.

Some software vendors are taking a more focused approach to carrier management. Cambridge, Mass.-based Celarix touts Rate Explorer, a tariff and contract-management tool designed for ocean transport. It was built in response to partial deregulation of the ocean-shipping business, allowing for confidential service contracts and eliminating most public tariff filings.

Ocean freight rate negotiation can be an arduous task, involving multiple carriers and thousands of pages of detail on commodities, equipment, service features and surcharges. Rate Explorer puts those elements into a database, then utilizes a search engine to access contract terms for a given move. The shipper can choose from the option that yields the best possible rate, says John Preuninger, executive vice president and general manager of Celarix.

Document accuracy is a key concern. Two recent studies of large global carriers uncovered an average error rate of 22 percent in bills of lading, says Preuninger. The average amount of the error was $180, skewed 60 percent in the carriers' favor.

The Third-Party Dilemma

Third-party logistics (3PL) providers need new solutions for freight-cost management as much as shippers do - and maybe more. Increasingly, their role as go-between hangs on their ability to maximize service while minimizing cost. In the devilishly complex world of international shipping, that means finding a tool that can relay real-time information to sales staff, convert it to a booking, and provide tracking and tracing, all on the same platform.

Yellow Global, a 3PL with headquarters in Overland Park, Kan., developed such a capability in-house when it failed to find one on the open market, says Jim Ritchie, president and chief executive officer. The result was Global QBT (for quote, book and trade), which gives users the ability to go online, input key data on a shipment, and within seconds get a rate. The shipper continues to receive updates on the carrier's offer until it books the shipment. Yellow's system also includes a TMS module that keeps tight rein on carrier performance, Ritchie says.

He says the greatest source of savings on freight today lies in network design, where shippers can match their web of warehouses with actual customer need. Often that leads to a sharp reduction in distribution points and general overhead.

Shippers have yet to tap into the full resources of 3PLs in their search for savings, says Roger Haeussler, president of the international division of Exel Logistics in Hayward, Calif. Only around 10 percent of Exel's customers use its landed-cost calculator (acquired mostly from NextLinx) and other analytical tools. Many prefer to do the job themselves. But Haeussler sees a growing dependence on 3PLs for that service, as shippers shed themselves of tasks that aren't thought to be within their core competencies.

They're also looking at cost-cutting measures such as shipment consolidation at origin, movement by air in bulk, and breaking out of smaller shipments after customs clearance - a setup that's ideal for multi-customer 3PLs. Along with a cross-dock operation that minimizes standing inventory, shippers can realize freight savings of roughly 20 percent, Haeussler says.

Experts caution against looking for all freight-management tools in a single place. They also urge shippers not to underestimate the many challenges of international transport. When a company goes global, its domestic freight experts usually aren't equipped to do the job, says Hebert. "Shippers will lose if they think it's a viral effect," she warns. "They have to invest energy, time and dollars into managing global supply chains."