Every shipment takes time. Lead time is the total duration from when a load is ready to ship until it arrives at its destination. This includes both handling time (preparing, packaging, staging) and transit time (the actual movement). Lead time is a defining service characteristic of transportation. This article highlights considerations for lead time without distracting readers with industry jargon, policies, or quantitative references. It is the fifth entry in an open-ended series exploring the nuances of moving things from A to B. If you haven’t read the earlier entries, start with the first one here for an overview of transportation parameters.
Lead time shapes customer expectations, inventory planning, and service quality. A product that arrives late can be as problematic as one that arrives damaged. The faster something must move, the more options narrow and costs rise.
Components of Lead Time
- Ship Time: The preparation phase. This may include picking, packing, staging, and waiting for pickup. A pallet ready at 8 a.m. but not loaded until 4 p.m. has an eight-hour ship time.
- Transit Time: The movement phase. How long it takes to physically travel the distance. Transit time can be as simple as driving across town for groceries or as complex as moving a container ship across the Pacific.
- Delays & Buffers: Customs inspections, congestion, weather, and scheduling windows often extend lead time beyond the planned baseline.
How Range and Equipment Interact with Lead Time
- Longer ranges usually lengthen transit times.
- Faster modes (air, dedicated truckload) reduce time but increase cost.
- Equipment constraints (weight limits, transfer needs, or specialized handling) can extend preparation or require slower modes.
Lead Time Categories
- Short Lead Times: Same-day deliveries, couriers, and local runs. Think grocery delivery, urgent spare parts, or ride-hailing services.
- Medium Lead Times: Regional or national distribution, often one to five days. Examples include parcel carriers, LTL shipments, and scheduled replenishments.
- Long Lead Times: International shipments or custom manufacturing orders. Ocean freight may take weeks; complex builds or space missions may span months or years.
Strategies to Manage Lead Time
- Parallel Processing: Prepare and stage shipments while prior loads are still in transit.
- Mode Optimization: Match the transportation mode to the urgency of the shipment.
- Inventory Positioning: Place goods closer to customers to reduce transit time.
- Visibility Tools: Tracking and proactive communication can make long lead times more manageable for customers.
Example
Imagine an automotive supplier shipping critical brake components from Germany to Michigan. By ocean freight, the transit time may be four weeks, plus handling. By air freight, the transit time may be four days — but at a significant premium. A blended strategy might stage inventory in a U.S. warehouse for immediate fulfillment while replenishing stock by ocean.
Lead time is part science, part strategy, and part patience. If you’ve ever had a shipment show up early, you know how powerful it feels when this part of transportation goes right. Understanding lead time and the factors that drive it, companies can balance cost, speed, and reliability, enabling the design of service strategies that meet customer expectations.
St. Onge Company’s logistics and facilities design experts can recommend both transportation strategies and facility design improvements. Faster pick, pack, and ship processes performed in the right geographies will improve your company’s service capability!
—Connor Frey, St. Onge Company
