£75-£100k savings per year on direct importing costs
28th July 2017
Electrosteel Castings, based in Chesterfield import between 500-600 containers per year from India. The UK arm of the Electrosteel Group, they are a leading global manufacturer of Ductile Iron Pipes, Fittings, and Ancillary Pipeline Products - supplying a global marketplace.
There was an astounding lack of transparency from their incumbent freight forwarder
Having remained loyal to their freight forwarder for more than a decade, the company appointed a new managing director - Stewart Bailie. All costs across the business were scrutinised by Stewart and upon investigating the import fees and related disbursements - it was identified there was an astounding lack of transparency.
Lack of transparency made changing forwarder a high-risk option
With previous experience of Spatial Global’s openness to scrutiny, Stewart called in Rachel Morley to help with a complimentary forensic audit of just what was going on. Rachel quickly established there were significant savings to be made across the breadth of activities. This wasn't limited to simply reducing the tangibles like cargo fees and disbursements, but included efficiencies in the way products were unloaded at the Electrosteel yard – which would reap less tangible, but no less rewarding savings.
Cost savings identified included dwell times, demurrage, restitution and cargo transit
Lack of transparency and poor communication are typical bedfellows in freight forwarding. This means there’s usually plenty of easily avoidable hidden costs, and Electrosteel were no different. With professional relationships with Felixstowe port and the shipping lines engaged on the clients behalf, the picture soon became clear to the team challenged with the discrete investigation. More efficient coordination of transport between the port and Electrosteel was a critical area. It could make quick savings by maximising the landed container storage and optimising the road haulage of the cargo.
Further efficiency savings through strategic delivery to the Electrosteel yard
The lack of strategic optimisation of road haulage was something which had been causing Electrosteel considerable frustrations. The Spatial Global Navigator Audit identified Electrosteel were unaware of the possible options, so could not take any action to avoid the chaotic approach to deliveries. The issue was the way the containers were loaded. The ductile iron pipes were nested inside one another to maximise the available container space - like a Russian doll. However unloading these trailers took considerably longer because each pipe needed to be extracted individually and then carefully stacked. This resulted in poor operational performance because of lack of planning.
New process flow optimised yard ‘materials handling’ capability
Understanding with each shipment there was a mix of containers holding palletised cargo and ductile pipes, Spatial Global scheduled the arrival of containers. Ensuring the containers with the most intense unloading requirements were met with the maximum resources at the Electrosteel yard upon arrival. This enabled the yard team to plan and manage resources and be fully prepared on an individual container basis. They could now schedule the necessary manpower and equipment to ‘off load’ whatever container as it arrived to a structured and predictable timetable.
The greatest reward was Electrosteel took back operational control
Gary Doolin, Senior Manager at Electrosteel Castings UK commented:
Once we had a clear picture of what was going on we were able to work with Spatial Global as a partnership. It was as if they were an extension of our business. Their audit looked at how our operations involved in managing the imported freight when it arrived, and how it impacted on our business. They looked at the wider impact of activities and didn't simply quote on the work they could undertake - but designed a solution which had a much wider and positive impact on the business.
All costs and activities were broken down making it easy to make the transition
The rewards were immediate, and the new operational processes made the whole experience a less stressful part of the job for the yard staff; who had been fully consulted by the Spatial Global team during the audit. It was this ground up approach which directly contributed to the significant savings we have experienced consistently for the past four years.
The 1 year contract still going strong 4 years on
Originally the commission for Spatial Global to manage our imported freight was for an interim 12 month contract, this was designed to enable us to ‘bed in’ the new operational processes and source an internal manager to facilitate this freight import role. However, as a testimony to the Spatial Global relationship, the contract has run for 4 years, and we've enjoyed considerable savings and significant internal operational improvements. As we now execute the transition of the routine freight management to an internal role, as the original plan, we acknowledge it is only possible because of the fully tested and openly shared working procedures designed and implemented by Spatial Global.
The best thing about dealing with Spatial Global'
Well, apart from the incredibly responsive service - which navigated us through a global demand for containers - the best thing about dealing with Spatial Global is their integrity, transparency and professionalism. They are very easy to do business with. When Stewart introduced them to Electrosteel, they reacted very fast to the challenges set. The Spatial Global team quickly got a 'big picture view' of both what was happening and what needed to change. Then, developed a robust project plan to execute it.
We know we can rely on Spatial Global as a strategic partner and we are keen to keep the relationship working for both parties for the foreseeable future”.