Electronic Component Distribution: Questions to Avoid a Million-Dollar Logistics Mistake

Do you ship electronic components? This does not just mean high-priced electric modules and devices. Electronic component distribution is pervasive in nearly every aspect of our lives, from thermostats to salt shakers and even Wi-Fi-enabled slow cookers. With products becoming more technologically advanced every day, shipping practices should evolve as well. Failing to audit your electronic components’ supply chain could be a multi-million-dollar mistake. Before you send your next shipment out the door, ask the following questions:

Should we use temperature-controlled equipment? 

Devices needing electronic component distribution should maintain a temperature between 50 and 75 degrees Fahrenheit. Large temperature swings, even in more temperate climates, now are less infrequent. Northeastern states have experienced some of the highest temperatures for the region on record. Snow and ice, once rarely seen in southern portions of the United States, are happening more frequently. Shipments coming into the Port of Los Angeles traveling to midwestern states might experience a 30-40 degree swing in just a two-day drive. Temperatures outside of the optimal zone for electronics can freeze batteries, crack cases, or melt plastic. Temperature-controlled equipment keeps cargo at a constant temperature and can help control for moisture with special venting. Newer equipment also can sense ambient temperature and adjust interior cooling/heating accordingly for fuel savings. If you move cargo with electronic components, temperature-controlled containers and trailers may be the safest way to go. The same is true for warehouses. Those without proper heating and air conditioning systems are not right for shippers specializing in electronics.

Does our contract provide enough claims protection? 

Many shippers use evergreen contracts with transportation and warehouse providers. Check the date when your contract was last reviewed and pay special attention to language around claims. Look for claims exclusions that could leave your company holding the bill. This might include an inaccurate bill of ladings, loading delays, or incidents interpreted as force majeure. Next, review cargo and inventory insurance thresholds. Ask for proof of insurance. Should the warehouse catch fire or a trailer wreck, the supplier must have enough liability insurance to cover your loss. Suppliers generally carry a static policy and do not increase insurance limits unless notified in advance. If the value of your shipment fluctuates, make sure your suppliers have insurance coverage to match.

Are we protected against theft? 

Cargo theft costs companies up to $50 billion annually. Electronic components represent one of the highest theft categories. One trailer of stolen goods could amount to a more than $400,000 loss per instance. Combat these losses by working with transportation providers operating under stringent security protocols for high-value shipments. This should include procedures like trailer tracking devices that operate when disconnected from the truck, verbal dispatches, remote engine shutdowns, and routings that do not stop for fuel for at least 200 miles from the pick-up location. Inside the warehouse, look for cameras, inventory tracking metrics, RFID devices, and strict employee guidelines for theft. Ensure your logistics partners understand which shipments are high value so they can act accordingly.

Are our products packaged correctly? 

Electronic device components may come from across the world and travel by airplane, container ship, and truck. Therefore, their packaging must sustain lots of miles and movement. Assess electronics packaging for its ability to keep interior items secure from jostling and free from moisture. If packaging is part of the fulfillment process, the material must be easy to use and efficient. Make sure to design packaging with considerations for how units fit on a pallet or within a gaylord. These can be strapped or wrapped in plastic to prevent theft or damage further.

If your company would rather specialize in making goods rather than shipping them, it’s time to talk to JIT Services. We handle millions of passive and active electronic components. Let us audit your supply chain and engineer an electronics strategy that is as advanced as your products.