Getting there is half the fun
By Matthew N. Skoufalos, September 09, 2011
It was mid-June, and the MRI machine was scheduled for transit on Sunday, noontime. It would have to be Sunday; delaying that start could be perilous. Departing from L.A. to Chicago was the first leg on a global jaunt that would take it half a world away. The final destination was a hard-to-service location where cargo shipments arrived on a less-than-regular basis.
Mark Smith of Avatar Relocation Services got the call at the Thursday night load-in. The unit was crated, and the enclosed trailer in which it was scheduled to ship was far too small. In fact, the MRI unit’s dimensions were so much larger that the device would need to be secured on a specialized flatbed truck. And it would have to be done on Sunday.
“If it misses that flight, how many flights are behind it?” Smith asked. “With that big a piece, there aren’t that many options.”
Smith started working the phones at Atlas Van Lines, putting out mass broadcasts to different hauling departments to find a truck. Within 90 minutes, the problem was resolved. But Smith knows he can’t always count on that kind of good fortune.
“We were really lucky,” he says. “You have to basically use every tool in the book you have. I count on experience; I’ve been doing this for 21 years. You’re not going to solve every single problem, but you’re going to correct it.”
Smith has a dozen more of the same kinds of stories: a PET scanner that couldn’t leave Tennessee until a rigger had modified the wheels on the gantry of the rollback wrecker they’d gotten to haul the unit. Sourcing heavy-gauge metal from odd places to extend dock plates that didn’t reach the beds of the trucks backing up to them. Renting a safe jack from a gunsmith shops to move a CT scanner. Coordinating a shipment out of Quebec without a French-to-English interpreter.
“You’ve got to get creative,” Smith says. “Medical is definitely a tricky end of the business. It’s a whole different set of challenges.”
The burden of addressing those challenges without incurring additional costs, losing time in transit or risking the security or stability of a major piece of capital equipment is placed squarely on the shoulders of the logistics agencies with which equipment brokers, manufacturers, resellers and servicers interact on an everyday basis. Yet as the same pitfalls emerge consistently, customers aren’t asking themselves where they fit within the equation. If more did, Smith says, not only would he have fewer headaches, but his clients would be happier too.
“I could get a call tomorrow for a CT scanner that’s got to come out Saturday morning,” he says. “I understand the other half of it is, literally, you’ve got a broker who bought it from a leasing company, and they’re trying to sell it, sell it, sell it, and they tell the guy who bought it, ‘it’s yours now, but it’s got to come out.’ I know how it happens, but God, if I could have any more notice to do it! They expect you to perform miracles.”
Pick Your Poison
Where is your equipment coming from? In cases where hospitals are dealing with an OEM that has sold them an equipment upgrade, the vendor will traditionally handle the load-in and deinstallations “from soup to nuts,” Smith says. But what happens when a hospital or off site facility takes it upon itself to move a piece of equipment? They’re out there, Smith says, and they’re “totally green.”
“That’s the ironic part about this business,” he says. “If anybody thinks they can sell medical equipment, they’ll get in it. You’ve got to do your homework to know who you’re dealing with.”
Smith says the only way to probe the depth of his customers’ knowledge base is to ask a number of questions. What are the year, make and model of the piece of equipment? What’s the weight on the system? What part of the country are they in, and does he know of any technicians in the area? And is the equipment even ready to be shipped?
“As you get smaller, the easy things – C-arms, portable X-rays, ultrasounds – a majority of those are fairly easy to move because they’re on wheels,” Smith says. “Mammography units have to be deinstalled; that makes a big difference. If it’s still hardwired into a wall, liability-wise, we can’t take that out. You need an electrician.
“Every single job, if you don’t check, it will come back to bite you,” he says.
Smith says many shippers truly don’t understand the logistics associated with the locations from which their equipment is shipping and that to which it is destined. For example, older cities in the Northeastern U.S. have narrower roadways and need a number of smaller trucks to move shipments in multiple loads; the cost goes up. If your shipper hasn’t gotten a parking permit three weeks in advance of the ship date, you might have to pay $300 or $400 in parking tickets or possibly a tow charge. The unique details of moving from Point A to Point B sometimes can make a move financially infeasible.
“Most of the dealers won’t tell you where the equipment is until you give them a deposit because of that reason,” Smith says. “After many years of doing this I know how the whole thing plays out.”
Victor Cruz of Logical Solutions Services in Seaside Heights, N.J., says that in the shipping business, “every phone call is treated as an obstacle,” particularly when moving a piece of equipment internationally.
“Ninety percent of what we handle are brokers who do OEM legwork,” says Cruz. “If you don’t know what’s involved in taking a device out of the country or bringing it in, that’s the biggest thing we face.”
Brokers who think their responsibility ends at sales risk serious liability, Cruz says. Being the shipper of record bears certain legal implications, particularly when dealing with matters international transit.
“Your name is on the export records that go to the U.S. Customs office,” he says, which can put a shipper on the hook for demurrage and detention charges if there’s any hold-up at the border.
If the device accession number – used by the FDA to track the service record of any imported or exported medical equipment for recall and safety purposes – is unavailable at the time of transit, a piece of equipment can sit at the terminal while the issue is being worked out, racking up hundreds or thousands of dollars in fees.
“Depending where you’re going, that could be your profit, or it could put you behind the eight ball,” he says.
Moreover, Cruz says, his customers either don’t understand Incoterms – the International Chamber of Commerce transaction lexicon – or have never heard of them.
“I had a shipment recently that the contract read, ‘CPT,’ which means ‘seller pays for carriage,’” Cruz says. “He had no idea.”
When equipment can’t come off a truck, where will it end up? Some imaging equipment must be stored in a specialized warehouse, and whether there’s one nearby could mean the difference of hundreds or thousands in repair bills, provided the device can even be moved off the truck on little or no notice. And of course, what happens when packages are improperly packed for shipping?
“We always encourage our customers to take out insurance,” Cruz says.
Doing It In House
Block Imaging of Lansing, Mich., places such a priority on transportation and logistics that it has established a full-time internal project management team to facilitate its demand. As Dave McAndrews, Senior Vice President of Imaging Solutions, says: it’s not about avoiding issues altogether, but having the experience to deal with the issues that come up when they do – because something always comes up.
“The shocking regularity comes with contractors who don’t know what they’re doing when it comes to imaging projects,” McAndrews says. “We have a significant number of problems that will almost always happen, from the amount of air conditioning needed to the size of the doors to the way that the equipment has to be wired.
“This business is one that is very heavily reliant on a big wide base of knowledge, and the groups that are successful that are smaller only do one thing and they do it very well,” McAndrews says. “There’s no way that one person in our organization could have the knowledge to do every type of imaging product. That’s impossible.”
McAndrews says that hospitals that may be acquiring brokered equipment for the first time may previously have been accustomed to working exclusively with manufacturers and risk a lot of assumptions.
“I know that I have problems from time to time where hospitals are looking at two different quotes, and one includes all the installation services, the transport, the after-the-fact warranty – and they don’t understand the differential in cost,” he says.
Kenn Dextrom, who heads up the project management team at Block Imaging, says that forethought can count for as much as experience does.
“Chance favors the prepared,” Dextrom says. “We like to live with the Boy Scout motto here: Always be prepared. We’ve been good about putting together templates here at the beginning of jobs to see the kinds of issues that pop up. It never fails that you go to deliver a C-arm and they go, ‘Oh, we forgot to tell you that it’s on the second floor and we only have stairs.’”
Some of the items on Dextrom’s checklist for first-time buyers:
The logistics industry offers constant lessons in humility, McAndrews says.
“I bought a T-shirt last week that says: ‘Confidence: the feeling that you have before you understand all the facts.’”
Working with a partner in your broker and your shipping service and involving them early in the process cannot only ease the sale, the physical exchange of equipment and the overall relationship among all parties involved, but it can lead to new business. Cruz cites an example of a buyer whose rigging quotes ranged from $20,000 to 30,000 above cost. When he caught on to what was happening, the client was grateful and rewarded him with a dozen additional shipping contracts.
“We’ve gained their respect and their business,” he says.
As Smith says, “We’re the very last people that anybody thinks about, but we’re some of the most important people. You want the cheapest price, the fastest service, and it’s got to arrive in good condition.
His best piece of advice? “Start early.”