Jackpot! You’ve created an enticing new product, manufacturing went off without a hitch, and consumers are waiting impatiently to purchase it. Now how do you get it to them? If your products are manufactured abroad, choosing the right port of entry is one of the most difficult and important decisions you will make as a company. Which port you choose will influence your entire operation, and should ultimately come down to cost and convenience. However, there are more costs to consider than just the cost of ocean transportation:
Transportation Costs: Of course, the origin of the shipment and the cost of ocean shipping should be a major determining factor in your choice, however, it’s not the only transportation cost that you need to consider. The geographical location of the port also determines how much you’ll pay in total transportation costs over time. The costs of container drayage to your warehouse and outbound transportation to retailers and consumers can quickly add up if you choose the wrong port of entry. Picking a port close to major metropolitan areas means that you’ll spend less on transportation because your products won’t need to travel as far to reach consumers. To put this into perspective, here is a comparison of consumer access from the major East Coast ports:
|Transportation Time||Ports of NY & NJ||Port of Virginia||Port of Savannah|
|1 Hour||13 million consumers||1.6 million consumers||590 thousand consumers|
|2 Hours||27 million consumers||3.2 million consumers||1.5 million consumers|
|4 Hours||44 million consumers||14.9 million consumers||11.6 million consumers|
Warehousing Costs: The more densely populated the area is around a port, the higher the warehousing costs will be. However, the higher warehousing costs will be offset by lower transportation costs. In general, companies spend 4 times more on transportation than they spend on warehousing. If you’re warehousing in a highly populated area, your transportation costs will be lower because your carriers won’t need to travel as far to reach retailers and consumers. You’ll want to have a warehouse that is close enough to your port of entry to be efficient for carriers but far enough that your storage costs aren’t sky-high. Consider where your largest retailers and distributors are located and look to be somewhere in between them and your Port of Entry.
Multiple Ports of Entry: Having a single port of entry may make it easy on you, however it may not be best to serve your customers. Have product coming from Asia? Somewhere on the west coast sounds great, right? Not so fast, when your East Coast customers expect orders to be fulfilled and delivered within 3 days, you won’t be able to deliver on their requirements. While it does add complexity to your overall supply chain, importing products through multiple ports, allows you to not only service your customers better, but also provides you supply chain some resiliency as you don’t have all your eggs (or inventory) in one basket. Several years ago, as the West Coast was dealing with work stoppages as the port, many importers learned a valuable lesson where they began moving goods through multiple ports so they would be able to service their customers even when the unexpected happens.
Choosing the right Port of Entry is only one of many complicated supply chain and logistics decisions that your company will need to make. At Port Jersey Logistics, we serve as more than just a third-party logistics provider, we’re also your partner. We can help guide you to the right decision no matter your logistics challenge. If you’re struggling to make a tough supply chain decision, contact Port Jersey Logistics today to discuss your options.