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Importing, Costs & Control, and Case Study
Full Service Solutions
In late 2018, we approached a company in the North East. At this time, the Company was experiencing significant growth in container shipments into the UK from various global origins. Their sales forecasts indicated a 50% increase in business for the following year.
Existing Shipping Arrangements:
The Company from the North East had traditionally relied on a freight forwarder for their shipping needs and had seen substantial growth while doing so.
Primary Focus on Transition:
Our primary objective was to transition all of Company A’s container shipments to be handled directly with a shipping line. While this promised substantial cost reductions, it did require some adjustments to their daily operations.
Active Engagement and Representation:
During the transition period, we played an active role by engaging in discussions with both their existing freight forwarder and potential new shipping lines. To ensure clarity and proper representation, we were equipped with the Company email address and business card, signifying my role as a representative of the company’s interests.
Staffing Adjustments:
Given the Company from the North Easts existing staffing, which consisted of only one employee, it became clear that they needed to hire a new employee to effectively manage the shipping operations. This new hire came with an annual cost of £25,000.
Transition Timeline:
The transition process spanned approximately 18 months, during which we shifted all origin points to the new shipping arrangement.
Cost Savings and Benefits:
In the first two years (2017 and 2018), the transition yielded substantial cost savings as shown in the table below:
| Year | No. of TEU | Savings | Average Saving per TEU |
| 2017 | 1250 | £268,000 | £214 |
| 2018 | 1778 | £417,830 | £235 |
Additionally, there were supplementary costs totalling £105,000 per annum. With shipment volumes increasing in 2019, the savings exceeded £500,000. These savings were calculated based on rates received from two major freight forwarders.
Operational Benefits:
The new shipping arrangement brought several operational benefits, including priority bookings during space constraints, complete visibility of container locations, the establishment of a consolidation hub in Spain for smaller LCL shipments, and access to preferential UK haulage rates with the flexibility to perform drop and swaps when required.
Importing, Costs & Control, and Case Study
Using Our Connections
A company in Sheffield, that was responsible for moving approximately 500 containers annually from China and Turkey, managed a diverse mix of both FCL (Full Container Load) and LCL (Less than Container Load) shipments. In collaboration with HG28, we utilized our valuable partnership connections to establish LCL hubs in both of these key origin points.
This strategic move not only granted the Company greater control over their shipping operations but also delivered substantial cost savings. Most notably, it significantly reduced the volume of inventory that Company B needed to maintain in the UK, consequently bolstering their cash flow. As a result of these measures, the company realized approximate annual savings of GBP 80,000.
The establishment of LCL hubs in China and Turkey was pivotal in streamlining the Company from Sheffields shipping operations and optimizing their supply chain. This comprehensive approach not only afforded them heightened control over their shipments but also translated into tangible cost efficiencies. Furthermore, the reduction in the inventory held in the UK bore testament to the initiative’s impact on cash flow, further reinforcing the positive financial outcomes of this strategic move.
Importing, Costs & Control, and Case Study
Overcoming Expectations
We approached a company in Manchester, who imported approximately 250 FCL (Full Container Load) containers annually, they were looking for a solution to gain more control over their shipments while remaining cost-effective. Leveraging our extensive network in India, HG28 facilitated a partnership between the Company from Manchester and a trusted agent who could fulfil their requirements.
This strategic alliance not only provided the Company with the desired level of control but also met their budget expectations, resulting in significant cost savings of approximately GBP 40,000 per annum.