Since the beginning of the covid-19 pandemic, the world of freight transport, under heavy pressure, has resisted. To support shippers and importers in the face of soaring freight rates and container shortages, digital solutions are emerging as an effective alternative.
International trade shaken by transport shortages
Freight transport is undergoing two successive crises. The first one, on air freight, has led to a drastic decrease in passenger and freight transport capacities. The second, due to the shift to maritime transport, is now causing a shortage of containers and great difficulties for shippers to find the necessary transport capacity.
In addition, prices have soared. According to Thomas Assemat, import director of Bolloré Logistics in Le Havre, quoted in: “As of January 31, 2021, a Shanghai-Fos costs $8,835 for a 40-footer“. The rates are multiplied by 3, sometimes 4 or 5, and the delays are getting longer. A dangerous equation, leading to costs but also to a decrease in the quality of service.
Shippers then face a triple challenge: a lack of capacity, a phenomenal increase in freight rates and a deterioration in service quality.
The digitalization of transport to anticipate management difficulties
Shortages, prices and delays… The alternatives in terms of transport remain weak for the shippers. Air freight remains at a low level and as for other modes of transport, they prove to be non-existent or unsuitable for massive international flows: rail and sea are saturated and road is not very optimal in terms of costs and CO2 emissions. Forced to endure the crisis, shippers can nonetheless count on digital tools to limit the impact on their operations on three different levels :
Understand, manage and trace its international flows
Having an analytical vision, monitoring its flows, understanding the impacts of the crisis and how to optimize its operations in a context of high variability prove to be complex. In order to continue to operate at an international level, despite the crisis, digital solutions such as TMS software or the transport collaborative platform not only provide visibility on physical flows and their costs, but also enable the company to share them with its internal and external customers and partners. The TMS Transport, a real control tower, also allows a better understanding of the distribution of costs and to control them, by customer and product line. The shipper then understands and analyzes what he is undergoing and facilitates the control of his operations, especially his invoices.
Control transport flows, their visibility and cost
Once its scarce transport capacity has finally been found, it is therefore necessary to optimize it as much as possible by managing the grouping of orders, sharing information with forwarding agents and performing an optimized container filling calculation. Whether the containers are full or partial, systems such as TMS software or the collaborative transport platform provide a clear view of the portfolio and grouping of orders as well as the scheduling of departures. A digital solution such as the transport software thus enables the automatic processing and grouping of orders in order to optimize the filling of containers paid for at gold price.
Integrating precise calculation tools, taking into account the dimensions of the parcels, the TMS software calculates an optimized filling of the container and allows to quickly provide information to the forwarding agents. By anticipating and measuring its needs as accurately as possible, the shipper can thus manage the little capacity available in times of shortage and reduce the cost of transport that has become prohibitive.
Reorient and optimize with TMS software
Last step, the choice of sourcing and departure zones. Thanks to the digitalization of transport and the development of management software such as TMS, it is now possible to obtain a vision on the evolution of rates and import flows. Thus, shippers with various sourcing zones can take advantage of this shortage situation to review their scheme and reevaluate the zones according to the current freight rates. The TMS solution allows this calculation of the full cost of purchasing the product. The shipper thus makes an informed decision on the choice of supplier and supply.
The rise in freight rates, particularly from China, is reshuffling the cards. Today, how can we know, in an automated and secure way, if a supplier based in the Maghreb has not become more competitive than an Asian competitor? In these times of instability, digital transport management solutions are proving to be very valuable in reorienting sourcing wherever possible.
Ensure the optimization of its international trade
Understanding, acting and reorienting one’s transport scheme: three phases of actions that must be agile, efficient and reactive for importers and shippers in the middle of a storm. To achieve this, digital solutions such as the TMS software demonstrate their ability to work in a global way: on the impact of the product – its cost, its sourcing -; the order portfolio and its filling; as well as the optimization of the entire scheme, subject to the new international transport situation.
The upheavals and changes that the sector is currently undergoing will undoubtedly leave their mark. With no visibility on the duration of the phenomenon, and no certainty that markets will return to equilibrium, shippers will once again have to show agility to adapt, hence the growing importance of digital solutions dedicated to transportation and its international management.
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