Steve’s Shipping News: Outsourcing Budget Management of Your Transportation Spend

We had an interesting opportunity recently to bid on an RFP put out by a Fortune 500 shipping company. It included a requirement that the respondent takes responsibility for managing the shipping company’s transportation budget for all spares, equipment, and supplies. They wanted more than a marine logistics provider. They wanted a partner who would help them beat their budget and protect their profit margins.

It’s the first time I’ve seen a requirement like this in a marine logistics RFP, but it’s well-aligned with the direction Horizon has been moving in recent years. It also makes a lot of sense as part of the larger trend in shipping toward outsourcing, remote management, and automation.

Outsourcing Marine Logistics

According to a recent survey by Gartner, 85% of shippers expect to outsource more of their supply chain and logistics in 2020. “The question no longer is whether to outsource,” says Gartner’s Courtney Rogerson, “but what and how much to outsource.”

Outsourcing is nothing new, of course. Shipping companies have outsourced their marine logistics to Horizon for 50 years and counting.  What I’m seeing though is not just an increase in the volume of marine logistics outsourcing. It’s a deepening of the relationship and a shift toward accessing more of our strategic expertise.

As Gary Wollenhaupt writes in Supply Chain Dive, “more than merely outsourcing for lower cost, companies should look for partners that provide a higher level of value in critical areas where they have expertise.”

Toward High-Value Partnerships

We’ve been moving toward these higher-value partnerships with many of our customers for years: empowering them with digital tools and experienced advice.

Our Horizon WorldTrack portal lets customers track their deliveries in real-time. Our automated financial reports help customers evaluate their vendors and keep themselves on budget. ​​And we offer guidance to all our customers as they weigh their options for speed, reliability, and cost.

All of this helps our customers manage their budgets while keeping their fleets sailing safely and on schedule. However, while we equip and counsel our customers, the daily decisions still fall on them, and they remain responsible for sticking to their budget. They’re mostly very good at it, but it is a lot of work.

Better Budget Management for Better Margins

Today, it seems to me that shipping companies are looking for more. They want partners who will work proactively with their management to streamline transportation costs and help them stay at or below budget, protecting and enhancing their profit margins. They want true two-way transparency, open communication, and shared accountability for success.

As Mark Franklin writes at DA-Desk, “The most common factor in the decision to outsource is, of course, to increase profit margins, by lowering the expenditure on labor and operational costs. Improving quality, gaining access to knowledge, and previously unachievable bulk discounts, are also driving factors.”

Mid-sized shipping companies generally can’t justify the expense of dedicated personnel to closely monitor their logistics spend, so outsourcing is an obvious way to manage labor costs. Large shipping companies see value in accessing the decades of specialized expertise that an outsourced partner like Horizon offers.

With partnerships like these, we’re able to extend our contributions beyond the day-to-day decisions. We’re taking on a larger strategic role to help shipping companies manage their annual costs. Ultimately, we’re helping them achieve better profit margins.

The COVID-19 Factor

The coronavirus pandemic didn’t create the need for outsourced logistics budget management, but it has certainly amplified its importance.

As I write this, 80% of flights worldwide are grounded. Airfreight costs are through the roof. According to a recent story in Reuters, “freight operators have had to resort to chartering flights at prices between $1.3 million to $1.7 million each between Asia and [the] United States. … That compared with about $500,000 to charter a flight on average during normal times.”

This matches our experience at Horizon, where typical air shipping costs have been about 200% higher.

As reported in a white paper by international reinsurance company Willis Re on the impact of COVID-19 on the marine industry, these costs are skyrocketing at the same time that supply chains are struggling, major ports are slowed, demand for shipping has dropped, and many shipping companies are facing unprecedented financial pressures.

Customers are depending on us more than ever to help them navigate these challenges. When air freight costs are tripled, what should still go by air, and what route will keep costs as low as possible? What should go by sea freight? What can travel by truck or train?

So many decisions that used to be routine now require careful strategic and financial analysis. Maritime logistics companies like mine can help, but it takes more than delivery-by-delivery advice. We need to be part of the larger conversation of a company’s operational costs, budgets, and revenues.

How It Works

I’m pleased to say we won the contract with that Fortune 500 shipping company, and we’re working together on a standard operating procedure through which we’ll manage their budget wisely. I’m sure there will be some adjustments as we learn together what works best, but we’re beginning to define how outsourced logistics budget management works.

The company is providing us with their transportation budget for all spares, equipment, and supplies, and we’re handling all the logistics. We’ll serve as a gatekeeper for all operational requests, analyzing routing options, and making fiscally responsible choices. Where a request risks busting their budget, we’ll push back and recommend alternatives, such as delivery to a less difficult port where costs will be lower. And of course, when a delivery is truly mission-critical, we’ll always find a way to get it where it needs to go.

We’ll provide weekly reports of vessel spends, budget adherence, and other KPIs. We’ll also monitor the performance of all their vendors, intervene where needed, and provide regular vendor reports to inform future purchasing decisions.

Most importantly, we’ll be a fully integrated partner with the company. We’ll be authorized, informed, and empowered to use our expertise to help keep their fleet sailing, on time and on budget. It’s rewarding work for us, an opportunity for everyone on the Horizon team to apply our highest value skills in the service of this customer.

I expect that more shipping companies will want similar services soon. All of us at Horizon look forward to deepening these partnerships and doing even more to help our customers succeed. Reach out to us to learn more about how we can help you during this challenge.

Our COVID-19 Commitment

Good afternoon:

I’d like to thank you again for trusting Horizon Air Freight with your global marine logistics needs.

As we’ve all experienced, life has changed dramatically over the last two months due to Coronavirus (COVID-19)—and this includes our business lives as well.

Yet, we recognize that your shipping needs are as important as ever.

I want to personally assure you that we are here for you—and committed to keeping your ships on the water. The team at Horizon is working 24-7 to maintain on-time delivery of your spare parts.

I am especially grateful for your understanding as we navigate the temporary increase in freight costs due to vast reductions in air cargo capacity across the globe. We look forward to when carrier capacity and costs return to normal levels.

Thank you again for your trust, support, and partnership during this unprecedented time.

If you have specific questions or would like to discuss any aspect of our work together, please contact us directly.


Steve Leondis
Chief Executive Officer

The Ships Are Still Sailing

As we write this from the midst of the COVID-19 pandemic, tens of thousands of commercial, scientific, and military vessels are still sailing our world’s seas. In this difficult time, we need them more than ever.

Container ships are transporting critical medical supplies: hospital beds, ventilators, personal protective equipment, and more. Tankers are bringing the fuel that heats our homes and keeps our cars and emergency vehicles running. Fishing fleets are helping to ensure that we’re all well fed. Research vessels are continuing their important work to better understand our planet. And military fleets are protecting our oceans and coasts.

The world’s shipping fleets do this for us all, every day, even in normal times. But during this crisis, their work is all the more essential. And, just as in normal times, the world’s ships need spares, equipment, and supplies in order to continue their vital operations.

Of course, these are not normal times, and the logistics of getting ships what they need has become a lot more complicated. 75% of flights are grounded. Many international borders are closed. And we’re all under new restrictions as we try to slow the virus’s spread.

So at Horizon, we’re doing what we always do: Digging into our decades of experience. Gathering our global know-how. Activating our global network of agents. Chartering flights. Hiring trucks. Arranging hand-carries to ports all around the world.

When the usual way isn’t available, we’re finding a way. We’re making a way. We’re getting it done.

The Netherlands to Tampa in 36 Hours

Recently, one of our customers needed a critical spare part delivered from The Netherlands to Tampa. An important towing vessel would remain out of service until the part arrived. But with so many flights grounded, the usual flight route of Amsterdam to Atlanta, Atlanta to Tampa would have delayed the part’s arrival by 5-6 days.

So we got creative.

Late in the day on a Thursday, we sent a dedicated truck to the supplier in the Netherlands, then drove it to Amsterdam, where it was loaded on a flight to Newark. In Newark, we had it picked up by another dedicated truck, which drove it to JFK. In JFK, it was loaded onto an overnight flight to Tampa, where a third truck picked it up and delivered it to the shipyard on Saturday at 8 a.m. The entire transit took about 36 hours.

It was a much more complicated routing than would have been necessary in ordinary times, but it got the part to the ship just as quickly. And with the critical spare installed, the ship got back to work.

Houston to Gdansk When It Couldn’t Be Done

Another customer needed a critical shipment transported from Houston to the Gdansk Shipyard. In normal times, this transit would typically take 5-6 days. However, because of the pandemic, all international flights to Poland were suspended until at least April 26, and the German/Polish border was tightly controlled, resulting in long delays.

Doing things the usual ways in these unusual days, it might have taken two weeks to get the shipment delivered. Many forwarders would probably have said it couldn’t be done.

We got it done in four days.

We picked it up in Houston and put it on a plane to Frankfurt. In Frankfurt, our agent expedited the clearance through German customs, then a dedicated truck drove it to the shipyard in Gdansk. The waiting ship was soon back in service.

We’ll Get Through This Together

When you’ve been doing this work as long as we have, you learn that navigating crises is just part of the job. You either develop resilience or you fold at the first emergency. Today’s pandemic is in some ways unprecedented, but we’ve been through hard times together before. The Great Recession and some smaller recessions before it. 9/11 and other acts of terror. Wars in Iraq and Afghanistan. Hurricanes, tsunamis, and other natural disasters.

Through all these crises, the global fleet has helped the world keep running, and we’ve helped to keep those ships safe and sailing. Whatever challenges lie ahead during this pandemic, we’ll figure it out together. We’ll find a way. We’ll get it done. It’s going to be OK. Please contact us directly to learn more about how.

“Thank you for the hard work. It has been seamless for us. I haven’t seen any shipping disruptions with the exception of cancelled flights, which is beyond your control.”

Tracy Fleming

Horizon Air Freight and Ecochlor Unite for Clean Oceans and Waterways

Industry Leaders Announce Collaboration to Ensure Adherence to the Highest Ballast Water Management Requirements

Horizon Air Freight, a leader in global marine logistics announced today a collaboration (or alliance) with Ecochlor, a leading ballast water management manufacturer, to ensure compliance for shipowners.

“Horizon Air Freight is very excited about our collaboration with Ecochlor to provide a turnkey solution for their customers,” said the company’s Chief Executive Officer, Steve Leondis. “Our joint initiative will help shipping companies comply with installation requirements for IMO ballast water treatment, a critical step in helping to keep our waterways clean.”

Justin Knight, director of operations at Ecochlor, also celebrated the partnership. “Horizon has been in the maritime industry for over 50 years, and we trust them to get our shipments on-deck and on-time,” he said. “We are very excited to bring on additional support 24 hours a day, 365 days a year in our efforts to provide superior support to owners.”

Together the companies will ensure that their clients receive their marine equipment on time and on budget, secure in the knowledge that they are keeping the oceans and waterways safe from contamination and invasive species.

About Horizon Air Freight

Horizon Air Freight keeps fleets shipshape and on-schedule with global marine logistics by air, land, and sea. Critical marine spares, supplies, and equipment from any vendor worldwide: consolidated, expedited, delivered door to deck. Whatever you need, wherever you need it, we’ll get it there on time and on budget. With more than 50 years of experience, we keep more than 3,000 ships safe, able, and sailing. To learn more or to request a quote, call 800-221-6028 or visit

  • Trusted worldwide for 50 years
  • More than 3,000 vessels served worldwide
  • 18,000 shipments per year, 99% on-time delivery
  • Service 24/7/365
  • Agents in 32 countries, ships everywhere
  • Key managers have 25+ years at Horizon
  • State of the art IT track and trace freight management system

About Ecochlor

The Ecochlor® Ballast Water Management System uses a two-step treatment process to treat ballast water – filtration followed by chlorine dioxide (ClO2). The system’s effectiveness is not impaired by variations in salinity, temperature, turbidity, organics, and vibration. The system is easy to operate with low power and is reliably engineered for long life. There are no retreatment or neutralization requirements on discharge. Ecochlor has IMO and USCG Type Approval and meets or exceeds regulatory guidelines.

From the very first ballast operation and for everyone thereafter, Ecochlor engages in direct communication with the vessel’s crew. We don’t wait for our next service call but are on board twice a year for chemical resupply and to support the ship’s crew in training and equipment maintenance. More than 95% + of our systems are reported as in service and working at sea worldwide. In addition to being the most reliable and easiest system to use, Ecochlor offers EcoCare®, the only treatment guarantee for ballast water management systems in the maritime industry.