Over 20 years ago, when Carlos Villazon was working as an apprentice freight forwarder for a local Sydney company delivering paper contracts and handwritten cheques, he had no idea that he would later become one of the most in-demand and valuable business assets.
Villazon and his business partner, Chris Dimitriou, are now front and centre of the pandemic supply chain issues, helping businesses navigate the current conditions.
Villazon and Dimitriou are founders and directors of privately owned boutique freight forwarders, Stelno Group.
“We are amid one of the most challenging times for businesses across the country and the world. As an island nation, we only have two means of getting products into the country, by ship or by air and costs and demand for these services have skyrocketed. In fact, in some cases the cost has increased ten-fold,” Villazon said.
“Getting freight into the country and forwarded to warehouses and stores now involves significantly more complex negotiation and coordination. The challenge is to find a carrier with capacity with cost now second in priority.
“The situation is not going to improve; it will continue to get worse. This is something businesses can’t do themselves. They need to partner with the right freight forwarder to achieve the best outcome. Businesses that don’t may find themselves low or even out of stock for months or longer. This is how bad things are going to get.”
While much of the freight forwarding still operates on old manual systems, the Stelno Group invested in world-leading technology solutions to build omniscient real time live data dashboards and matrices that provide global freight carrying visibility including availability, capacity, timing and cost.
“Our live systems enable us to view, book in and track freight capacity and transit information at any time. This enables us to ensure we are able to provide our retailers and other business clients with the best freight solutions, guaranteeing that their businesses can operate without interruption,” Villazon said.
Villazon has the following advice for businesses that import products from overseas.
Diversify product providers
“While not always possible, aim to diversify your product providers across different countries and time zones. This ensures that you are able to source goods at all times should countries be hit with weather or major supply events due to Covid impacted port closures and other issues.”
Stock up on inventory
“If you have the financial capacity to do so, stock up for 12 to 24 months in advance. This way you can lock in your costs upfront and ensure you have stock available and can add more as capacity and costs allow.”
Partner with a good freight forwarder
“In the freight forwarding industry, there are only a small few that have introduced advanced technology to augment capacity and the ability to act with speed, which is a key ingredient for highly tuned supply chain management.”
Consider different ways to fund inventory
“Stocking up on inventory involves a larger cost to the business and one that many businesses had not considered two years ago. At Stelno Group, we opted to fund our operations and growth using invoice financing. Working with Earlypay, we were able to set up the facility in days and start generating regular income off the back of our invoices. This meant we didn’t have to deal with banks or take out a line of credit.
“Alternative funding options such as invoice financing are ideal solutions for businesses operating in the pandemic as it allows you to grow and deal with supply chain issues easily and quickly.”