05 Nov Why Freight Forwarding Is More Than Rate Shopping and Space Booking
The work of a freight forwarder requires more than just shopping for cheap prices and storage. When part of delivering an efficient service to the consumer, a forwarder faces many obstacles. How the freight forwarder addresses these problems sets them apart from the rest of the kit.
If things are good or bad in the shipping and freight business, one thing is for sure, and that is, there is never a dull moment in the life of a freight forwarder. In general, when there are problems of different kinds to be met on a regular basis.
The right service provider is the customer’s eyes and ears on the shipping and freight industry, and any forwarder worth its salt must be able to overcome these obstacles without any major interruption to the customer’s business.
Below are some of these obstacles with some real-life examples that a freight forwarder can face during daily operations.
Delays due to short weeks and holidays While ordinary people welcome short weeks and holidays, these short weeks and holidays could become a major schedule, cost, and delivery nightmare if not properly planned for the freight forwarder.
Festivals such as Easter, Whitsun in Europe, Thanksgiving and Christmas in the USA, Qing Ming Festival, Dragon Boat Festival and Chinese New Year in China can and have caused bottlenecks around the world. Not only in terms of delivery schedules, but also in the preparation of customs clearance procedures.
Recently, for example, on Easter holidays, consumers had to face long waiting periods of more than seven days for customs in Hamburg to process customs paperwork (in German). This backlog was reportedly the result of the arrival in Hamburg of four mega container ships during the Easter holiday season. At the time, the backlog was as much as 11,000 applications.
Such delays also have a further impact on effects such as lack of availability of trucks for both inbound and outbound movements, with a waiting time of about two weeks in the extreme to secure a truck.
Challenges due to port congestion Port congestion can occur due to a number of factors, such as delays in port efficiency, harbour strikes, seasonal rushes, temporary circumstances and bad weather.
In the months of April / May 2017, several companies are hit by heavy congestion throughout Shanghai. This congestion was exacerbated by dense fog, higher-than-normal volumes of containers and a shake-up of shipping alliances.
Some of the companies was trapped in more than 100 container ships waiting for a total of 53 hours.
Such delays may have adverse effects on time-sensitive JIT (Just In Time) companies such as the automotive and retail industries.
China Port Congestion Disruptions due to market changes In April 2017, 3 major shipping alliances 2 M Alliance, THE Alliance and the Ocean Alliance were launched.
While many expected these mergers to be of some benefit to shippers and shipping lines in an already struggling industry, the first feedback we received points to a badly planned transition.
This lack of planning, combined with a lack of transparency regarding the use of transshipment hubs, appears to have led to short-term changes in the shipping schedule, increasing the possibility of a freight rollover.
Port Streaks Port Streaks are another major impediment that affects all customers alike.
As a result of the new dock workers ‘ strike on 5 June, some of the biggest port terminals in Spain came to a standstill as shipping lines, such as Maersk, diverted freight to other ports in Portugal, Morocco and Malta to avoid strikes.
CONCLUSION The scope of the freight forwarder’s job is not limited to negotiating freight prices, contracts and booking of freight on behalf of the customer, but is much more active and intense.
All of the above challenges caused by external forces can lead to a sudden and severe change in shipping schedules, which is a major inconvenience to customers and their operations. It also pushes forwarders to find alternative ways to support clients.
With practise, market knowledge and innovation, freight forwarders will face the challenges of the above. The aim is to make global logistics as easy and convenient for customers as possible.