Schedule Blunder: How Delivery Delays Complicate Land Development Operations

Land development and the construction business are interrelated trades that involve a great deal of material transfer. This does not only involve building components like bricks and cement, but also furniture and fixtures for the built structure. More importantly, these industries need equipment and machineries for continuous operations.

Due to the bulk of the commodities and the large amount of money involved, land contractors and developers treat delivery deferments as a sensitive issue. Without a reliable strategy or project logistics management similar to, they will face the following issues when it comes to overdue cargoes:

Delay in Production

One of the primary reasons for project interruptions is to hold up on the delivery of supplies and equipment. Builders and contractors can easily resolve minor details like small batches of building materials by cancelling the shipment and ordering from another source. Unfortunately, this may be a tricky situation when it comes to bigger deliveries. They may either wait for the cargo, or pay for the cancellation of the order and purchase from a nearer but usually more expensive alternative.

Additional Operation Costs

Delays in the shipment always entail additional expenses apart from repurchases. These are just a few examples:

Storage fees – Most ports impose charges for overdue cargoes. Depending on the arrangement with the transporter, the builder or contractor may shoulder this payment.

Employee salaries and overtime payments – Delay in production oftentimes lead to longer operation days, which prolong labor requirement. The longer worker shifts usually have a higher compensation rate, resulting in a higher salary expense.

Penalties – While the builder may impose delivery fines because of the delay, they in turn, need to pay contract penalties to their client. They may also need to pay fees for the extension of the construction permit.