June 24, 2020 | COVID-19, Industry Insights

Warehouse Crisis and the Future of Storage

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Ever have to suddenly store 9 containers of PPEs? Or 20 containers of athletic shoes? Unfortunately, questions like this are now commonplace due to the supply-chain disruptions caused by the global pandemic.

These questions, in addition to an assessment of current industry trends and innovative on-demand warehousing solutions were discussed on the recent webinar presented by the Airforwarders Association. Below are some of the key takeaways from the dynamic discussion.

Prior to the Coronavirus crisis, on-demand warehousing was growing due to consumer demands for same-day and next-day shipping close to the source. And as we’ve seen in many sectors, the crisis has accelerated the pace of change.

When the crisis hit early this year, supply chains were up-ended if not completely shut down. In many cases this has left freight forwarders searching for storage solutions for their shippers.

According to Brandon Fried, AfA Executive Director, “we’re facing a plethora of concerns nowadays… especially as it relates to risk management…”

On the webinar, Ken Kellaway, CEO E*Fill America and RoadOne Intermodal Logistics shared his perspective on current trends.

Kellaway stated that, “the big dip in rates in transportation sector, should come back soon. Demand will accelerate as we open up the economy.”

Also, he sees capacity tightening up on the truck side as well as the warehousing side, as the extensive inventory is starting to burn off again and big box stores are starting to reorder. He sees very strong rates on the air freight side of things since the planes have been grounded, but with the opening, more will shift back to ocean.  With further market corrections expected, this means continued uncertainty where unexpected warehousing of goods may still be needed.


Warehouse Insurance Policies & Risk Management in the Face of Supply Chain Disruptions

Shippers and forwarders should plan for a future of supply-chain disruptions, thereby driving the need for warehousing and storage solutions. They should also consider the need for additional warehouse coverage for the items that now require storage.

“There are many considerations to keep in mind for freight forwarders from a risk management perspective”, states Rick Bridges, VP of Roanoke Trade. “Forwarders need to know not only if the warehouses are insured, but what about the terms and conditions of warehouse insurance policies? How are they limiting their liability?”

“And this really is not unlike transit, so for a forwarder really understanding it to be similar to what a carrier has for limits of liability. Just like carriers, warehouses limit liability, and they are not liable for the losses they don’t create,” states Bridges.

On the webinar Rick continued to share best practices for arranging storage at warehouses. He urged the audience to make sure the cargo owner is aware of the warehouses’ terms and conditions coupled with their limits of liability.

Also, be wary of warehouses that sublease floor space to other companies. It’s possible third parties will have access to your merchandise.

Rick concludes, “You really have to know what you’re signing yourselves up for. Certainly, shippers may have concerns about their product being comingled with other products or potentially even things like intellectual property rights being exposed to other folks. Just make sure there’s visibility between the shipper and where and how their goods will be stored.”

For more information on warehouse insurance policies or risk management best practices, please contact Rick or your Roanoke Trade representative at 1-800-ROANOKE.

We thank the AfA for the opportunity to participate in the webinar.


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