Seneca Textiles would be all at sea without the expertise of Freight on Board.
Seneca Textiles managing director Dennis Bygrave calls them ‘mother-in-law calls’. As in, when your mother-in-law is on the phone it generally isn’t a social call—something is up and you’d best be paying attention.
Seneca markets fabrics, often sourced from Europe and Asia, to Australasia. It deals in high-end, high-quality items influenced by international trends and seasonal fashion changes, and in such a business, the world can change very quickly.
In his 27-year association with Freight on Board (FOB), a customs brokerage and freight-forwarding management company, Bygrave has made more than a few mother-in-law calls.
“Part of the secret of our success is the service angle; the communication and information flow we get from FOB helps us a great deal here. We get weekly updates on all freight being shipped so we know exactly where something is so we can better inform and service our clients. Occasionally, given the nature of the business of transporting goods around the world, something untoward comes up. That’s when I preface my message with, ‘This is a MIL call.’”
One such moment happened recently. Bygrave explains.
“There was an amazing opportunity for us to showcase some fabrics in a nationwide catalogue in Australia. There was big advertising support and it was quite a significant investment for us. Someone in the production cycle, however, forgot to confirm deadlines and literally days before the publication was going to press we got the call asking us where our material was.”
This wouldn’t have been such a big logistical problem if the samples were in Australia or New Zealand—but they were in Portugal. And there was no holding up the show. One day late and all the upfront costs would have been for naught.
“There is no way anyone not completely au fait with international logistics management would have had the knowledge and connections to make things happen. But they did and the fabric arrived.”
Bygrave maintains that having an expert logistics partner integrated into his model and way of operation takes all the stress out of what can be an incredibly worrying, and potentially costly, side of the business. Over time a strong relationship has developed between the two operations.
“The arrangement works well because it is built on trust—where FOB is most competitive it handles all shipping, customs clearances, logistics and the like but it is the first to put a hand up if someone else is better suited for a particular job. Having a positive and long-term association means it is taking a proactive role in looking after issues that may affect our business or profitability. More and more we are being involved in moving fabrics not just around New Zealand and Australia but also within Europe or from Europe to the far east. So an expert like FOB will know when there are changes to VAT, GST, import duties and the like and can make arrangements and adjustments to the process to work to our advantage.”
FOB’s Dave Robertson says that the ideal arrangement is when his company performs not just a logistics management function but is integrated into the actual running and management of a particular business.
“That way we can provide and create more efficiency as we’re involved on a day-to-day basis and can integrate into production cycles, material availability, shipping options and so on. Also, in this region, economies of scale mean that production of different products is being done either in Australia or New Zealand for distribution in both markets. If we are involved on both sides of the Tasman in logistics management we can take a great deal of stress out of the operation.”
Seneca is a sizeable operation but in terms of volumes and potential logistical nightmares it is a different kettle of fish compared with another FOB client, SCA. The Swedish-based multinational was founded in 1929 and develops, produces and markets personal care products, tissue, packaging, publication papers and solid-wood products. In 2009, net sales amounted to some €11 billion. The SCA empire, based in over 100 countries, includes branches and manufacturing facilities in Auckland, Te Rapa, Kawerau and Tauranga.
Key FOB management have been involved in logistics management for the business since 1990. SCA shipping and performance improvement manager Rob Ashton says he deals direct with shipping lines in some situations but retains relationship with customs brokers to handle some parts of the business.
“We move 4,500 to 5,000 high-cube (76 cubic-metre) containers out of New Zealand and 2,500 to 3,000 high-cube containers into the country each year. Where it makes sense I’ll negotiate with a shipping line but where a broker might have a stronger relationship in a market I’ll let them manage the process. For example, out of Asia we are a significantly small shipper—around 1,000 high-cube containers a year—but the agent we use moves approximately 36,000 high-cube containers a year out of that region, so it makes sense to piggy-back on its volume to get the best outcomes on cost and service.
“An independent agent is also a good source of market intelligence—they are able to provide shipping information on what our competitors are doing as well as pricing plans they might be on. Also, being a 24/7 specialist business they can help clear urgent consignments and organise early release of shipments should that be required.”
Even with a well-oiled process there are red tape issues, and requests totally outside his area of expertise. Such situations, says Ashton, are when the true value and capabilities of a customs agent come to the fore.
“Case in point was when we were selling some machinery overseas and working through another third party who lacked the expertise. Quite soon the whole process turned to custard.
“We got in touch with FOB and they knew exactly what to do. They stepped in, took care of the mess, sorted it out and we were then able to send the machine offshore. Otherwise the red tape would have stymied the process completely.”
FOB, Phone 09 303-3941