How an Australian mining company reduced demurrage costs and streamlined their supply chain with CargoValue
May 12, 2023
With CargoValue, they were able to take a more proactive approach, adjusting their shipment plan according to almost real-time inventory statuses, analyzing vessel wait times and their associated costs, as well as optimizing berth allocation to avoid clashes.
Root causes of demurrage
There are several factors that contribute to demurrage, some of which are familiar to companies whose supply chains have an element of seaborne logistics. For example, unpredictable weather conditions, such as high winds and cyclonic conditions, sometimes forced ships to wait. Tidal restrictions in the shipping channel further complicated matters, as vessels sometimes needed to wait for optimal tides to navigate. Finally, crane performance and the logistics of coordinating multiple cranes for simultaneous unloading added to the challenge of reducing demurrage costs.
CargoValue's impact on demurrage management
With the implementation of CargoValue, the mining company gained valuable insights into the root causes of demurrage and was better equipped to plan around these challenges. They gained greater visibility into stockpile space availability and could more effectively plan their vessel arrivals, minimizing the risk of stockouts. Furthermore, CargoValue's decision support tools helped them identify the optimal balance between stock inventory, demurrage costs, and freight. This enabled data-driven decisions that improved overall supply chain efficiency. In short, visibility was key when they started using the solution. The company could create annual plans for their raw materials as CargoValue combines inventory and shipments, meaning they were able to view the planned lineup to minimize clashes. The lineup management tool is feature that benefits their day-to-day operations.
While CargoValue has already helped reduce demurrage costs and streamline their supply chain, the company has identified several areas where they would like to see further improvements, and are working closely with CargoValue. These collaborative efforts have resulted in valuable insights and new ideas for enhancing the functionality of CargoValue's platform, which will ultimately benefit companies facing similar challenges.
A brighter future for their seaborne supply chain
The implementation of CargoValue has been a game-changer, enabling them to significantly reduce demurrage costs and streamline their supply chain operations. With ongoing collaboration and the potential for further improvements to CargoValue's platform, the company is well-positioned to continue optimizing their supply chain for even greater efficiency and cost savings in the future.