Port Centric Logistics | Definition | Advantages [2022]

Port Centric Logistics Complete Guide

In the logistics industry, the phrase ‘port-centric logistics’ often referred to as ‘PCL in supply chain’ is gaining popularity.

Whether you’re a young innovative start-up or a well-established multi-million-pound organisation, you will need your cargo to arrive safely and in the quickest period possible to its destination. The port-centric approach is an excellent technique to ensure that this occurs without fail.

Today, we explore the definition of phrase, why its gaining notoriety within the industry and answer the most frequent questions people ask in relation to what port centric logistics is.

 

What is port-centric logistics [definition]

In short, port-centric logistics is a type of strategy which outlines the location, logistics and distribution services at the port where the goods in question have arrived. In this current climate, the UK’s largest retailers have been favouring newer port-centric logistics to streamline and optimise their supply chains while reducing freight miles, with more companies realising the benefits.

The port-centric methodology works as an alternative to inland depots and centrally located national distribution centres, as it allows shipments to be stored at the port of arrival, and then redistributed from that location onto its destination. Port-centric logistics is a fantastically efficient form of distribution, providing many benefits from reducing costs, increasing efficiency, and being more environmentally friendly.

 

How does port-centric logistics work and what is an example?

The primary aim of port-centric logistics is to reduce the number of unnecessary freight miles during shipping and distribution. What can often happen is goods are transported to their port of arrival in one location, for example from the West, then they are transported to a distribution centre in the East, and then distributed to a customer back in the West. Essentially moving the goods back across the route that they have already travelled. All this does is use unnecessary freight miles, waste time, and increase business costs.

Port-centric logistics means that once goods arrive at the port, they are stored safely in warehouses and are then distributed from that location to consumers also in that location. This method therefore eliminates those unnecessary freight miles, whilst being more environmentally efficient.

Any reputable freight forwarder should advise strategies to improve the effectiveness, reliability, and the efficiency of your logistics operations. Their goals should align with your business aims and help you increase profitability while reducing costs and waste. To this end, we have developed a guide, listing our top tips to consider when it comes to choosing a forwarder.

 

What are the advantages of port-centric logistics

  • Remove or greatly reduce unnecessary freight miles
  • Help to reduce emissions and your company’s carbon footprint, therefore helping the environment
  • Reduce the costs of distribution by travelling shorter distances
  • Helps lower lead times to deliver goods
  • Streamlines the supply chain and increases efficiency as containers are unloaded, stored, checked, picked and distributed from a single port
  • Improves customer service, as costs are reduced and provides shorter lead times

 

What stimulated change?

 

The growth of the global economy, in conjunction with the events of COVID-19, has meant that the amount of goods that are now being transported via sea freight has increased exponentially. Statista recently reported in 2020 alone, around 775 million twenty-foot equivalent units (TEU) worth of containerised goods were handled at ports worldwide.

For example, Statista reports the port of Shanghai was the largest container port in 2020, handling containers with a capacity of 43.5 million twenty-foot equivalent units (TEU). In 2020, nine out of the ten busiest container ports were located in Asia, with the majority based in China.

To this end, shipping firms are now looking to streamline their services any way they can, for example forming alliances and expanding their fleets.

 

Intense focus on the supply-chain has increased

 

Ports are no longer just importing and exporting stops, now they are a vital integration within the whole supply chain, helping to improve efficiencies, create value for business and allow world trade to flow.

Connectivity is now a necessity, and it is not just shipper that are adopting the concept, but terminal operators, warehouse managers, operations teams, freight forwarders, are all coming to similar conclusions and taking similar actions.

Trade will always become greater and faster over time, which means logistics services need to keep up. Port-centric logistics is integral in this with connectivity at the forefront of this movement, bringing all logistics services to work together.

 

What can you do to help

 

We live in a world where change is the norm.

Every product and service are now considered a fast-moving consumer good. We want what we want, and we want it now. Delivery when and where we choose. And a buying experience that echoes the speed and convenience we have become accustomed to in other areas of our lives, this si a topic weve explored in depth through our Digital Transformation Journey.

However, Horizon can efficiently help manage your global supply chain and multimodal transport requirements. In combination with a port centric logistics strategy our unique platform provides advanced integration for tracking solutions such as real-time tracking, 24/7, 365 days a year, across the globe, covering all modes of transport for total visibility over the cargo.

It doesn’t stop there either. Horizon offers a control tower view of your operations, a detailed breakdown of tracking information such as destination ETA, VAT calculations for goods, HS Code lookup, shipment information, reference numbers, real-time access to invoices and documentation, and much more.

 

Final thoughts

For the entire team at DG International, everything begins with knowing our customers, knowing who they are, where they are and how they think and feel. We take a refreshing approach to freight forwarding and our logistics strategies are focused on delivering customer-centric solutions, not just port-centric solutions which challenge conventions and bring about meaningful long-term change.