Freight forwarding and international trade conditions are still volatile and are expected to continue to be disrupted by the impact of the COVID-19 pandemic.
On one hand, we can see encouraging green shoots, like growing vaccination coverage and, as a result, regions moving towards more routine business conditions.
On the other hand, the market situation remains fragile and businesses still must be able to adapt to an ever-changing environment.
That’s why you need reliable and up-to-date information – which is where we come in. Here is a snapshot of the latest industry news, trends and events, as well as a look at what’s coming up for the rest of 2021. Be sure to keep in touch with your Operations Representative to stay on top of the current situation and keep your cargo moving.
Industry wrap up & forecasts:
- Air Freight
Congested Market Conditions: the air freight market is heading into peak season and demand continues to rise. There’s a particularly growing demand in e-commerce and consumer related products. Supply chain levels and capacity remain limited.
COVID-19: supply chain operations are being affected by COVID-19 flare-ups in some key regions, including China, Vietnam and other Asia Pacific countries. Europe and North America are also seeing another resurgence in the number of COVID-19 cases.
Lockdowns: Extended lockdowns keep affecting production capacity and, as factories start to reopen, equipment shortages are expected. This is the case in the main manufacturing area of southern Vietnam, where lockdown has been extended until 15th of September and manufacturers have cut production or halted it completely.
From Ocean to Air: the market situation is becoming increasingly congested as a result of shippers shifting from ocean to air in an attempt to mitigate the effects of the global ocean freight market.
On the ground: the ground handling situation makes the transported goods available to shippers is also being affected by the high volume of major air cargo flights in key airports. There are delays in operations and shortages in trucking services. Turnaround times and reliability are under strain.
- Ocean Freight
Growth: global trade remains strong and is expected to continue to grow during the rest of 2021 and well into 2022. Commenting on this trajectory, our co-founder Alex Ewart said: “All major markets continue to consume at record rates, and until this either changes or significant capacity is added to the market, these current market conditions are unfortunately here to stay well into next year”.
Port closures: recent port closures have created a backlog which is still affecting carriers’ equipment availability and putting a strain on global operations and economies. For example, Yantian port stopped the entry of export containers and Ningbo port halted operations at their container terminal.
Supply and Demand: the Global Ocean market demand for 2021 is surpassing supply by more than anticipated. Expected global growth of demand is now 6.3% and expected global growth of supply is no higher than 3%.
Reliability and timely arrivals: global carrier schedule reliability hits a low 39% and the average delay of vessel arrivals is 6 to 7 days.
Record revenue: shipping lines are experiencing record revenue numbers and consistently upgrading their profit forecasts.
- Also happening:
Brown Stink Bug season: as you’re probably aware, the Brown Marmorated Stink Bug (BMSB) affects the shipping industry and poses a high risk for our local crops. The season starts in September and lasts until April. Remember your cargo can end up being destroyed if it fails to comply with the strict regulations imposed by the Department of Agriculture, Water and the Environment. Get in contact with your Ops Representative now and make sure you know what to expect for the Stink Bug Season 2021 – 2022.
How you can make your job easier:
- Early bird: get in early and book your freight as soon as possible. Bring forward your orders to ensure the inventory levels for Christmas and pre-Chinese New Year holiday. Alex adds that while inventory management used to be driven by just-in-time philosophies, that is, to hold as little stock as possible to reduce the cost of inventory, this is no longer the case: “That rule book has been completely thrown out whereby now buffer stock is no longer a luxury, but a necessity. While holding inventory isn’t exactly ideal, the operational degradation, lost sales and recovery costs have proven far more impacting than any savings from keeping stocks tight.”
- Don’t be kept in the dark: you should be able to know where your goods are at all times. Watch your shipments live on your dashboard with Explorate CargoTracker™
- Keep in touch: keep the communication going with Explorate. We aren’t just a tech platform – we’re a bunch of passionate logistics and freight forwarding experts, and are always here to help you (or just to chat!)