Logistics Tips

By Darlene Henke

During a renovation or construction project there are thousands of details that require the attention of Owners, Designers, Purchasing Agents, Project Managers, and many other team members involved.  One area that can impact the entire team is the coordination of goods for delivery to the property.  Below are 8 important areas to keep in mind when considering Logistics:

1. Goods in Storage – most warehouses will limit liability as it relates to insurance to pennies on the dollar.  Example, if a chair weighing 100 lbs is lost and liability was limited to $0.60 per pound, only $60 would be paid regardless of value. Additional insurance can be purchased through the warehouse or third party logistics provider.
    
2. Airfreight – carriers limit their liability similar to warehouses - usually to $0.50 per pound. More than 70% of airfreight shipped for hotels requires additional insurance to cover the value of goods. 
    
3. Proof of Delivery (POD) – contrary to popular belief, signing a POD “subject to inspection” does not create the basis for a claim. It is the legal responsibility of the claimant to prove who was atfault for loss or damage. When exceptions are noted at time of delivery "subject to inspection" – proving the carrier was at fault legally will be challenging. 
    
4. Port of Entry – FF&E coming from Asia can be routed to ports other than just Long Beach. If time exists in the schedule, an alternate port of entry may be closer to the hotel. Utilizing the closer port will reduce the freight budget and transit across the US.
    
5. Claims – if noted at the time of delivery, claims can be filed up to 9 months from the delivery date. If damage is concealed, a claim must be filed within 15 days of delivery; there is no guarantee or legal liability for the carrier to honor concealed damage claims.
    
6. Fuel Surcharge –fuel prices should not be as volatile as in 2008 but could change in the event of a national or natural disaster. Once the economic recovery starts, fuel prices will be likely to increase again.
    
7. Chinese New Year –every year this causes delays in shipping, at ports, and ultimately in receiving goods. In 2010 the New Year will hit around Valentine’s Day – make sure lead times have a little leeway if arriving right before, during, or after this time. 
    
8. Green Strategy – yes, there is such a thing in logistics. The EPA endorses specific organizations and all responsible logistics providers should be participating. It is up to you to make it a requirement for your project – ask your provider today if they are a member of one of these EPA approved organizations.