Friday, August 19, 2005

Contingency Plans - Hope for the Best, Prepare for the Worst

Can your company weather a logistics disaster, such as a terrorist attack, airport closure, or worker strike? Sudden disruptions will create possible long-term disconnects with your customer -- along with your customers' freight. Here are some common sense tips on planning for a crisis, and handling emergency transport changes when a major disruption happens:

1. Designate business continuity (Crisis) managers. Because any disruption to your business can be extremely costly, it is imperative to make managers within your organization responsible for your continuity planning. Give your point people the authority to carry out the job and make them responsible for all actions and outcomes, including emergency shipments.

2. Define all possible disruptions to your business. Business disruptions come in all shapes and sizes -- from natural disasters, fires, and chemical spills, to system failures and call center outages, work stoppages and unforeseen airport closures. Think through the gamut of scenarios that could present a shipping emergency for your company.

3. Hope for the best but plan for the worst. Outline the steps that need to be taken to remedy each disruption scenario. This includes making sure that everyone involved -- technology, operations, purchasing, transportation -- knows their role, as well as who is responsible for what actions.

4. Know where to get help. Because it's almost a sure bet that you'll need to expedite shipments in an emergency, talk to carriers about their capabilities before a crisis arises. While all expedited carriers are in business to speed shipments, they offer different types of services and have different service records. As with any purchase, you need to select carefully. Do your shopping in advance so that you've already identified your mission-critical carriers and will know who to contact immediately during a crisis.

5. Understand all your transportation options. There are numerous cost- and time-related issues to consider in choosing how you want to expedite your emergency shipments, including exclusive use of vehicle, two-way tracking ability, 24/ 7/365 availability, special handling requirements, and domestic vs. international capabilities. Your final carrier choice will depend a great deal on the nature of the emergency and your recovery needs.

6. Test your plan and get professional training. It helps if you test your recovery plan with your carriers up front to uncover any problems with the process. The cost of a test run will likely be minimal compared to the effect on your bottom line if your expedited transportation plans fail in a real emergency. Solicit training from professional risk assessment/training organizations.

7. When an emergency strikes, stick to your plan that was tested. Keep a cool head and follow the actions you've already outlined. Make sure everyone involved in the recovery effort maintains constant communication with each other to help ensure that your efforts run as smoothly as possible.

8. Even the best-laid plans can go be ready to improvise. Unfortunately, Murphy's Law has a way of creeping into emergencies. Be prepared for last-minute glitches that may cause you to alter your plan. For instance, if you planned to use a ground expedited carrier to transport a new generator for your facility but a flood has washed out the main road, you'll need to go to Plan B. The best advice: be flexible with your contingency planning. You might need to explore more than one option to resolve the crisis.

9. Stay current on factors that could change your plan. Contingency planning is an ongoing process because many factors can change your requirements. For instance, since the Sept. 11 attacks, security measures for cargo tendered to commercial aircraft have not increased, but the scrutiny has. According to FAA regulations, only "known" shippers who have customer records with the broker and either an established shipping contract or an established business history can tender packages or freight to commercial airlines. The ocean industry is another matter, with C-TPAT, etc.

10. Believe in your plan, and believe in the people that will facilitate the steps.

If you don't have a contingency plan, call Exel! Even if you don't have a formal business continuity plan, you can still help resolve your transportation emergencies by getting help from a quality organization that can handle multiple modes of transport.


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