In the past year, shippers must become more flexible and informed. Entering 2022, it is essential to remain agile, open to alternative solutions and keep abreast of the latest market insight.
Due to the continuous fluctuation of shipping, 2021 is a difficult year for the global logistics industry. Due to the outbreak of covid-19, changes in customs and trade, labor shortage and other reasons, the supply chain industry is experiencing Suez canal block, hurricanes and cyclones, port and terminal closures.
Even those who have worked in the supply chain industry for many years have not seen the degree of continuous interruption of the whole supply chain during this period of time. However, with this year's fluctuations, super collaboration has reached a new level, including individuals sparing no effort to help each other, more strategic meetings between shippers and freight forwarders, and constantly using historical data and current market insight to find smarter solutions.
Therefore, here are some key strategies that global shippers need to consider.
Seek creative solutions throughout the supply chain
At the end of the year, we usually see a surge in demand as shippers meet the quota at the end of the quarter and prepare for the upcoming Lunar New Year, during which many factories in China are closed. However, in early 2022, shippers will also face potential delays in the Winter Olympics, which will be held in Beijing in February. All this happened under the tight supply chain market, which needs time to ease.
As you prepare for 2022, please consider what different modes, trade routes or inland transportation strategies you can implement in the supply chain. For example, although it may not be feasible to transport 100% of your goods by air, air transportation is still the fastest way to replenish inventory, so giving priority to specific shipments will help keep the goods in transit.
In addition, LCL transportation is a strategy worthy of consideration as demand and rates may remain high at the beginning of next year. Generally, the space of LCL shipments is easier to find, especially in the market with limited capacity, because you are only looking for some container space rather than the whole empty container. Compared with today's air transportation environment, the expedited LCL service can continue to save a lot of costs.
Please remember that LCL transportation will not bypass the congestion of the port, so the inland strategy needs to be considered. At present, many maritime carriers are seeking to transport more in point multimodal transport (IPI) goods rather than focusing on port to port.
As you can see, viewing only part of the supply chain or one mode can only let you so far. It is important to consider all areas to keep the goods moving.
Leverage data and technology
Although the past year has presented many unique situations, and 2022 may be the same, historical data can still help us find solutions. Finding common trends and themes in cyclical data can provide you with an information advantage to make smarter decisions for your supply chain.
In addition, the right technical tools can give you the visibility and predictability you need to adjust. For example, with the continuous congestion and delay of the port, the enhanced ship route and tracking function helps to improve the efficiency and accuracy of the port ETA, and automatically send updates when changes are found. This is important because shipping is only part of it. Understanding changes in real time gives teams and customers the opportunity to react and adjust other strategies in the future.
Looking for Global trade opportunities
Although congestion and shortages in various modes of transport continue, one area you may find saving opportunities is the global trade strategy. Since each country's trade policy is unique and may change, it is important to meet regularly with your trade advisor to break through the complexity of total landed costs, including understanding import costs, determining the possibility of tariff recovery, and reducing tariff risk through trade agreements.
Last thought
Although there is no one size fits all approach, the above options provide shippers with strategies to help reduce delays and identify potential savings as we enter another year that may not be predictable. In the past year, shippers must become more flexible and informed. Entering 2022, it is essential to remain agile, open to alternative solutions and keep abreast of the latest market insight.
