On the world arena, capacity has nearly reached its limit, as shippers and importers continue to brave expensive charges and ever-increasing tightness.
The “perfect storm” plaguing ocean freight seas following the historic Suez Canal bottleneck, according to third-party logistics services firm GEODIS, has only gotten worse. On Asia-Europe lanes, rates are continuing to approach unsustainable levels, hurting freight movers and end consumers.
On the other side of the Atlantic, the same scenario is playing out, with rates skyrocketing. One check at SONAR’s Freightos Baltic Daily Index, which is an average of numerous channels between Europe and North America’s East Coast, reveals that rates have risen to levels not seen in recent years.
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Nura Kruciak, vice president of GEODIS’ Client Success Organization, explained why trans-Atlantic charges have nearly doubled in the last year, citing a variety of variables.
The Suez Canal debacle, as well as the coronavirus pandemic, have played significant roles. However, American shippers have also been affected by container and chassis congestion at both East and West Coast ports, according to Kruciak. When it comes to port congestion, Kruciak argues that it’s not a volume issue, but a location issue: assets are frequently at the wrong place at the wrong time. This, along with a reduction in scheduled sailings on particular trade lines, has made limits appear to be a permanent fixture.
Customers usually settle industry rates in the early summer months, but Kruciak said it’s been particularly tough to lock down contracts this year as freight forwarders seek more and more rate revisions.
“Right now, there’s a lot of saturation in the ocean market.” Bookings are being rolled or canceled in certain cases, and some of our clients are becoming apprehensive, so they’re switching to air,” Kruciak said. “Because of what’s going on in the maritime market, we’re seeing a lot more volume flowing through air operations now.” GEODIS is noticing a change in how our customers must move their goods and how ocean carriers price their services.”
Sticking to your guns is no longer a good idea, since domestic and global volatility has destroyed the status quo. In reality, the key to surviving in an adapt-or-die climate is to expect the unexpected; no one can foretell the future, but those who move courageously today will be tomorrow’s freight leaders.
However, operating with such assurance necessitates the use of the appropriate instruments. GEODIS’ Intelligent Real-Time Information System (IRIS) is a visibility platform for ocean and air cargo. This global all-in-one tool offers real-time online booking, pricing, invoicing, documentation, reporting, and import and export track and trace.
Kruciak discussed the versatility of IRIS’ user dashboard, which offers personalized snapshots of shipments, invoicing, and shipping data, as well as how its exception notifications keep stakeholders informed along the supply chain. Stakeholders can also stay up to date at all times using the IRIS mobile app, which allows them to book and manage shipments with only a few touches of the screen.
“IRIS is a highly complete platform, and we can quickly add more skill sets to the product if needed,” Kruciak added, outlining the requirements of one client who wanted to share GEODIS visibility with 610 of its customers so that they could easily follow their shipment documentation.
“I’m in the process of enrolling all 610 of their customers on IRIS, and they’ll get an alert every time a package is sent to one of their consumers,” Kruciak explained. “They’ll be ready for customs clearance by the time the shipment arrives.” As global shippers, working with GEODIS has been a proactive decision in that their end customers now have visibility that they did not previously have.”
As customers eagerly return to their pre-pandemic buying patterns, supply chain visibility requirements have reached an all-time high. It’s not just e-commerce that’s seeing increased traffic; parking lots at shopping centers and restaurants, as well as sporting events and concerts, are once again filling up.
“We’re approaching peak season, and the American economy is roaring right now. Maximiliano Bernaldo, GEODIS’ SVP of business development in the Americas, said, “It’s a harsh climate, and I can’t see the end of it.” “I don’t see things changing much for the rest of the year.” In reality, I believe things will be similar in the first half of next year, perhaps not as difficult, but inventory replenishment will remain the priority.”
Naturally, no two businesses are the same, especially when it comes to their visibility requirements. GEODIS was inspired to create a turnkey solution for enterprises to manage logistical and physical data as well as control logistical and financial processes as a result of this.
Control Tower enables users to manage purchase orders, as well as their fulfillment and invoices, in order to improve overall supply chain service quality.
“Because of GEODIS’ flexibility, our services are boutique rather than cookie-cutter. GEODIS’ capacity to design customized solutions sets it apart from other 3PLs, according to Bernaldo. “We truly engage with customers to find special solutions for them,” Bernaldo said. “We have the tools to deliver supply chain solutions, such as contract logistics, transportation management, fourth-party logistics service providers, control towers, and, of course, air and ocean freight forwarding,” says the company.
The reliance on visibility technologies has reached new heights as the global shipping sector moves deeper into a digital world. However, the industry’s requirements will eventually outgrow end-to-end visibility.
GEODIS’ vice president of strategic management, Raziel Bravo, stated that the company aspires to be a pioneer in forward-looking data analytics, with the potential to steer consumers away from predicted disruptions by providing alternatives.
“We’ve progressed from descriptive to predictive analytics, and we’re now looking at prescriptive analytics,” Bravo explained. “At GEODIS, we must continue to embrace innovative technology since it is the only way to better serve our clients’ demands while remaining competitive in the marketplace.” We’re not just looking at tailored solutions based on real-time data; we’re also giving them with forward-looking data analytics to assist them deal with any potential interruption.”
As freight reaches a season peak, as well as the large flood of Americans eager to return to their pre-COVID retail and food-service spending patterns, high spot rates and container challenges appear to be continual struggles for importers and global shippers through the end of the year.
Customers, according to Bernaldo, crave assurance the most in these conditions, especially when it comes to cost. For those attempting to acquire stable capacity, however, any kind of certainty is tough to come by.
“GEODIS has the characteristics of a large corporation, but we are still extremely boutique-oriented,” Bernaldo explained. “We have the ability to truly focus on the customer in order to prevent them from becoming lost in a large network, as some of our larger competitors frequently do.”
GEODIS has a one-of-a-kind ability to secure capacity for its customers, according to Bernaldo. Despite the chaos of the previous year, he claims the 3PL has secured favorable contracts for its clients with steamship lines in Asia and Europe, purchased new containers for clients in Vietnam and China, and even begun chartering boats in some markets. He explained that GEODIS’ readiness to take an innovative approach to its clients is well worth the risk.
Jack Glenn’s FreightWaves content can be found here.
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One of our external writers wrote the previous article.
It has not been modified and does not represent Benzinga’s perspective./n
