How to prepare for volumes in logistics during a pandemic

The client

Our client, one of the biggest and most successful international tobacco companies, owns six of the top 15 international cigarette brands in the world. Their products are sold in over 180 markets worldwide and hold the biggest market share.

How to prepare for volumes in logistics during a pandemic

The challenges

In order to streamline business functions, our client looked at defining their markets into clusters. The company specifically needed a reliable logistics provider to act as its extended arm within its North Latin America Cluster. This was a challenge because this was the largest of the client’ clusters, and hence needed the logistics partner to have:

  • Global presence and geographic scope
  • Extensive knowledge of the clients' operational needs
  • Experience handling FMCG operations
  • State-of-the-art solutions that could scale to suit large needs

This company also needed to work with local (Customs) providers, so their logistics partner would have to be responsible for clearing the goods and performing 4PL/Logistics tasks, but with fragmented sources in a 'manual' environment.

How to prepare for volumes in logistics during a pandemic

The Maersk solution

After careful consideration and multiple talks with Maersk, the client decided that Maersk would handle its logistics for the North Latin American Cluster (also called the North LatAm Cluster). The cluster consists of Canada, Mexico, Costa Rica, and the Dominican Republic, and decisions are made from its base in Guadalajara (Mexico).

As part of its services, Maersk offered to set up processes for purchase orders management, forecast/allocation, bookings with carriers, E2E follow up and visibility, as well as freight audits for the client company’s production sites in Canada and Mexico. As a part of these operations, Maersk had to take into consideration that the client’s business deals with volumes of 5900 containers/year in import and exports within the North LatAm Cluster.

While this client usually gives service contracts that last about a year, Maersk was awarded a 3 years’ service contract as a sign of trust in their processes.

How to prepare for volumes in logistics during a pandemic

The outcome

Implementing logistical solutions and plans during a pandemic for one of the largest companies in the world is a task, but one that we were equipped to deal with.

We had less than 2 months to deploy an important structure – (and activate a contingency plan in case shipments got delayed as a result of the pandemic).

We even received an award in early June 2019 for our excellent work for this client.

At Maersk, we aim to work as closely with the client to try and understand their needs, and expand our service portfolio accordingly.

Because we followed this approach, we were able to include Maersk Customs Services as part of our solution, just after 2 months of implementing it for the client.

Some of the business’ needs that Maersk fulfilled for the client included:

  • Implementing the split per category: The client needed one person who would oversee whole product categories. (For example, one single point of contact for LEAF TOBACCO for all the North Cluster, positively impacting stakeholder management & product specialization, regulations, etc.)
  • Implementing the best practices: With the support of the Customer integrated team, we implemented best practices such as integrated dashboards that are now used across all Latin America, not just the North Cluster.
  • Standardizing the Invoice approval data: We performed freight audits and reporting for the whole North Cluster.
  • Supporting changes in operations: We offered operational support in full capacity when the client chose to undergo a warehouse supplier change in Costa Rica.

For us it has been an enormous learning process and a very pleasant journey with Maersk. Hopefully we will continue along this path of collaboration.

Supply Chain Director in Latin America

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