Between shortages of raw materials which extend suppliers' production times, the maritime transport crisis and its price bubble, the teams responsible for Large Import flows at shippers must demonstrate more than ever agility and responsiveness to adapt the managing their activities in a high-voltage environment. Faced with such constraints, what are the best practices in terms of organization and management for shippers to secure their Import flows in the best conditions?
Global shipping in chaos
As pointed out by the New York Times in its article “Chaos Strikes global shipping”, each link in the global supply chain has been undermined for several months by the virus: leading to a profound disorganization of the waltz of containers from one continent to another, hitherto skillfully paced, with direct effects on transport costs and an additional challenge to initiate global economic recovery.
It all started with the sudden shutdown of Asian production chains and the implementation of exceptional health measures at the beginning of 2020, significantly limiting the flow of containers around the globe. Following this, millions of masks and other health equipment had to be urgently transported throughout the world, particularly in Africa and South America, with the result that containers had been left empty and not collected by shipping companies for several months, because they are far from their main areas of activity between Asia, Europe and North America.
Added to this are cargo ships stuck in ports waiting to unload, with standard processes slowed down by the lack of available labor on docks or on road transport. However, any container that cannot be unloaded at one point on the globe is a container missing elsewhere!
This is how the finely tuned machinery of global shipping has seized up at every link in the chain in recent months, generating an unprecedented rise in freight costs (with an average price of $1,500 for a 40-foot equivalent before the crisis, compared with rates of up to $5,000 today), unprecedented pressure on capacity reservations and growing uncertainty over delivery times.
In such a context, what are the key assets to “stand out” and somehow manage to reserve maritime capacity to get your goods to the right port?
Against all expectations, the question of volumes does not make a significant difference
One of the first reflexes could be to say that the weight of each shipper in the commercial relationship with shipping companies and freight forwarders makes the difference in securing maritime transport capacities. But the field experience of large shippers in recent months does not seem to confirm this hypothesis. It is clear that certain maritime routes are more under tension than others, but if we evaluate in a global way the international lines from Asia to Europe or the United States, the subject of shortage of containers initially of Asian ports is the same for everyone, regardless of the volumes of supplies in question.
Focus on a regional strategy
In a context where agility and responsiveness are king, one of the ways to manage positioning yourself on large import maritime capacity reservations effectively is to be able to count on the support of regional and local players. Indeed, it is more complicated than ever to follow all of your flows globally on various routes and to be responsive to the different booking opportunities that may arise.
For this, one of the solutions for shippers is to call on a wide and diversified panel of transport partners, benefiting from a strong regional footprint and focusing at 100% on the organization of their bookings and transport monitoring on a specific maritime route .
To ensure that the multiplicity of partners remains "manageable" and does not impact the administrative workload of the teams, it is key to rely on unified processes that include all service providers. The use of a collaborative platform such as Windle, makes it possible to simply connect all the players concerned for each supply flow. On the subject of transport organization – the platform streamlines all exchanges between booking and final receipt of shipments, a continuity of information essential to secure its flows and optimize its operational performance.
Get involved as early as possible
While bookings with shipping companies and carriers were until now confirmed around 10 to 15 days before the ship's departure, the current upheavals favor shippers capable of firmly committing to a reservation of maritime capacities for times twice as long. As Nikola Blatnik, Transport Logistics Director at Lacoste, points out, “In recent months, we have had to make a firm commitment to the booking of our containers approximately one month before the departure of the ships. With a strong development of chartering and longer routings on imports from Asia to Europe and North America, this capacity to definitively confirm its needs much further upstream than before in the execution of flows import is key.”
This requires shippers to have clear and extensive visibility on the different orders and goods to be transported in the next 30-45 days as well as their level of priority in terms of commercial activity to develop effective transport plans. This precise visibility on the flows to be imported, with the level of granularity adapted for operational staff to make the best decisions, implies fluid, end-to-end collaboration on the monitoring of the execution of supplier orders, from their validation, to their delivery to the carriers and until final delivery. Concretely, all actors in the chain must have a common collaboration tool to simply and efficiently exchange all information related to the execution of supply flows.
Import & Transport teams who do not have extensive visibility on the delivery of orders by suppliers and their possible adjustments in terms of availability date, precise volumes, timing forecasts or changes in the means of transport, will have difficulty committing to firm reservations one month before departure!
In the same way, the collaborative monitoring of this live information with transport service providers, provides the fluidity, precision and agility necessary in the daily management of large import operations.
Demonstrate agility and flexibility in a changing environment
Navigating effectively in an environment of highly disrupted Asian import flows, as explained previously, is closely linked to the ability of shippers to seize new opportunities, and therefore requires working with transport providers – freight forwarders and shipping companies – with whom the relationship is neither historical nor governed by long-term pricing agreements. Combining this flexibility in the field with maintaining the sustainability of the Supply organization is not easy and once again, complicated when operational staff do not have the processes and tools allowing this flexibility.
Thus, if using an unusual carrier implies losing all monitoring of the flows concerned, (this usually based on EDI interfaces with identified actors, because it is not relevant to set up such interfaces for a few containers punctual) is acceptable in very exceptional cases, but when the practice tends to become generalized, we quickly understand the danger for supply chains.
Here again, it is therefore a question of putting in place monitoring and collaboration tools compatible with these changing situations, and adapted as well to the methods of exchange of automated and structured computer data via the establishment of specific connections between the systems, as well as more occasional exchanges, which can be made via simple access on a web platform by transport operators – without technical investment or particular complex training.
There is no single method or magic solution for effectively navigating today's international maritime import environment, but some good practices which, as we can see, require an ability to demonstrate agility and flexibility. Having reliable, real-time information at each stage of the supply chain and ensuring direct dissemination to all actors in the chain (from the supply teams, Import, through suppliers, and transporters) allows to provide extensive visibility and operational agility, which can make the difference.
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