Global logistics/Ocean shipping: Averitt adds Hong Kong and South China as origin points for Asia-Memphis Express LCL service
Jeff Berman, Group News Editor -- Logistics Management, 11/24/2008
COOKEVEILLE, Tenn.—Averitt Express, a provider of freight transportation and supply chain management services, said it has rolled out additions to the Asia-Memphis Express, its less-than-container (LCL) service from Asia to the United States that was introduced in July.
Hong Kong and South China (Shenzen/Yantian Port) has been added as origin points to the Asia-Memphis Express, according to Averitt.
When the Asia-Memphis Express debuted, it began with one weekly sailing out of Shanghai, with plans to expand into Ningtbo, Hong Kong, Shenzen, the island of Taiwan, and Busan, Korea.
"This next phase of expansion shows the continued demand for consistent, reliable LCL service from Asia," said Charlie McGee, Averitt's Vice President of International Development, in a statement. "We expect to add more origin points in the future."
In July, Averitt said that the Asia-Memphis Express may be able to offer transit times that are up to ten times faster than traditional LCL service, and McGee said that the Asia-Memphis Express has been planned for some time by Averitt, because the inbound market to the U.S. market from an LCL perspective has been dramatically underserved from the infrastructure of the service providers that currently handle that business.
“The basic model that exists today is that cargo gets consolidated at the point of origin in Asia, and the majority of it is sent into the Port of Los Angeles, where it is broken down by one of four major service providers,” said McGee in an interview earlier this year. “And that fallacy in the service is when they break down those containers, they are sitting in Los Angeles trying to build full domestic loads out of international cargo to every customs hub in the U.S. (which have varying volume levels, depending on location).”
The net result of this, he explained, is that the cargo sits in Los Angeles anywhere from a once a week closure to once every other week closure when it moves from Los Angeles to its final destination. This presents problems for importers, because they seldom know what that timeframe looks like, he said, because the timing and service tends to be inconsistent at best. He also explained that having multiple service providers at the U.S.-based end destination makes for a fragmented network from an entity perspective.
This situation is what led Averitt to go forward with the Asia-Memphis Express. However, he noted that the service goes beyond Memphis, which he described as a hub, as opposed to Los Angeles. The service actually caters to the entire southeast region—and parts of the southwest region—of the U.S. out of the Memphis market.
“The way our service [works] is that we are still consolidating in Asia, much like it works today,” said McGee. “We are consolidating cargo in Shanghai and building full container loads of mixed-customer cargo from that region and dispatching it from Shanghai once a week. And rather than sit and wait like they do in Los Angeles for a once a week departure, we rollout to various destinations every day.”
McGee added that when containers on the Asia-Memphis Express arrive at the Port of Los Angeles, they are shipped to Memphis intermodally. To do this, he said Averitt purchases a through-loop from its ocean carrier partners, which enables containers to be loaded on stack trains at the Los Angeles harbor and then moved with all the other interior point intermodal cargo to Memphis.
Memphis makes sense as Averitt’s main hub for this service, because it is one of Averitt’s main hubs for its LTL domestic network, as well as the location of its CFS Bonded Distribution Center.
McGee expects total transit times to be in the neighborhood of 23-to-26 days from Shanghai to all destinations served by the Asia-Memphis Express, depending how close to Memphis they are.
Con-way and APL do it, too: Averitt is not the first company to implement a delivery of less-than-container load (LCL) shipments from China to the United States. In August 2006, APL Logistics and Con-way Freight rolled out OceanGuaranteed, a service which they said provides faster transit times and day-definite delivery that is more efficient than air freight delivery. It offers what the companies describe as port-to-door guaranteed service from Hong, Kong, Shanghai, and Shenzhen to all U.S.-based destinations. And shipments failing to meet the delivery date commitment will receive a 20 percent discount.
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