Shipping industry crunch
Times are tough for the container shipping industry: companies are facing their worst ever downturn as a result of an oversupply of ships and weakened global demand. As a result, firms are looking for more and more ways to cut costs.
(We reported on the state of the shipping industry in blog posts last fall. Read up for some background on how things got where they are.)
Desperate times call for desperate measures
Recently, some of the big ocean carriers have turned to online e-commerce companies such as Alibaba to provide booking services for container shipping. Following Maersk’s lead in December, carriers CMA CGM and Zim have also signed on with Alibaba’s “One Touch” platform that provides direct shipping services to vendors in China.
Collectively, these three ocean container lines hold approximately 28% of global container capacity, signalling a trend to deal direct with technology-enabled vendors in an attempt to cut costs.
Online shipping services can be effective, but international trade is complex and can be subject to numerous complicating factors including capacity fluctuations, international legislation, handling/documentation requirements, cargo security regulations, and customs compliance requirements.
Dig deeper for the full story on the “savings”
Traditionally, freight forwarders have provided expertise and specialized services to help small to medium sized shippers utilize the services of large ocean carriers. E-commerce platforms make it easy for shippers to buy transportation services, but that convenience is not a substitute for the value-added expertise provided by freight forwarders.
Sellers using online e-commerce vendors for shipping services are missing out on the expertise offered by a freight forwarder. These industry experts provide a great deal of up-to-date knowledge when it comes to navigating the complexities – and potential liabilities – of international trade.
Without a freight forwarder, a company takes on a lot of work itself: consolidating small shipments, coordinating shipping schedules with the ocean carriers, ensuring documentation is correct, and providing on-forwarding services in the country of destination.
Shippers who elect to take advantage of online shipping services should carefully consider both the up-front costs and the value of the guidance and expertise that they get with a freight forwarder. Shippers who go the online route will not have easy access to advice on issues such as completing bills of lading, valuation, cargo insurance, packaging and handling services, ancillary charges, and options for handling shipping delays.
We can help
Our freight department can provide advice on the costs and service options available to shippers today. Make the most of your time and make the best choice for your shipping needs.
For detailed information, contact your Logistics Coordinator. For more general information, contact us today to discuss the best way to ensure the safe shipment of your goods.
Information provided by: Supply Chain Consultant - Cole International