Businesses that are able to eliminate a distribution center stopover from their supply chain can benefit from reduced freight costs, shortened transit times and improved visibility. These are some of the findings in a new white paper, “DC Bypass Offers Shortened Transit Times and Reduced Costs: But It’s Not for Everyone,” released by Purolator USA.
Distribution center bypass (DC bypass) has become a preferred logistics solution for many businesses, since it generally allows a shipment to travel directly to its end destination without having to make a stopover that can add hundreds of miles to a distribution route. DC bypass is appealing to manufacturers of seasonal merchandise, “hot” selling items and for businesses that prefer to maintain reduced inventory levels.
“Under the right circumstances, a DC bypass solution can eliminate as many as 7 to 14 days from a traditional supply chain,” says Purolator USA President John Costanzo. “A shorter transit time means that shipments can reach the store shelves faster, which can be a real competitive advantage, especially for makers of seasonal items and perishable goods. DC bypass is also an attractive option for U.S. and Canadian businesses that have high volumes of cross-border traffic. DC bypass can eliminate the need for a business to operate a distribution center across the border.”
Despite the many advantages of bypassing a distribution center, the white paper points out that DC bypass is not a viable option for every business. For one thing, a business must be able to pinpoint a shipment’s ultimate destination at the manufacturing site. This is because all shipment preparation – packing, labeling, RFID tagging – is pushed up the supply chain. If a business is unable to forecast inventory demands, then DC bypass may not be a suitable option.
Businesses considering a DC bypass solution also need to be confident that they have sufficient inventory levels to accommodate various snafus that may arise. Excess inventory needs to be available to address inevitable problems that occur, including breakage, wrong sizes/colors or errors in model numbers. For most retailers, running out of stock and disappointing customers would wipe out any benefit derived from DC bypass.
Purolator’s white paper also makes clear that not every logistics provider has the capacity to offer the DC bypass option. This is especially true for shipments traveling between the United States and Canada. A viable logistics provider must have extensive distribution networks throughout both countries, and also must have experience and expertise with the border clearance process.
To access the white paper, go to http://info.fastesttocanada.com/content/WP_DCBypass_PR.