There is no shortage of challenges when it comes to ocean shipping. In the last 18 months, the international supply chain has been chaotic, filled with skyrocketing container prices, astronomical delays, accumulating demurrage and detention fees and port congestion. This supply chain disruption has greatly impacted all organizations as they deal with stockouts, delayed product, increases in transportation costs and frustrated customers.
However, believe it or not, there are silver linings in the chaotic ocean market.
In the latest FourKites webinar, 4 Silver Linings of the Chaotic Ocean Freight Market, panelists Audrey Ross, Logistics & Customs Specialist at Orchard Custom Beauty; Peter Tirschwell, Editor, Maritime & Trade at JOC/IHS Markit; and Chris Stauber, VP of Ocean and Air Products at FourKites detailed the key challenges that they are seeing and what the responses to those challenges could mean for shippers in 2022.
Manual processes for track and trace, inaccurate carrier ETAs, delays and port congestion have plagued ocean shipping, especially in 2021. The common thread for many of these challenges is the need for end-to-end visibility. Shippers can use real-time visibility for every leg of their international shipment and receive the most accurate, predictive ETAs. While ocean visibility won’t stop delays and port congestion from occurring, it can eliminate black holes in tracking and greatly reduce the need for back-and-forth phone calls around the status of a shipment. “The demand for visibility has never been higher,” said Peter Tirschwell, “The importance of the supply chain has never been fully acknowledged as it is today.”
The pandemic and the ongoing ocean chaos have shown that there is a need for digitization. “Can you deal with this level of complexity and volume with manual processes?” posited Chris Stauber. Supply chain managers can no longer afford to track shipments on spreadsheets, call about the status of shipments or rely solely on the carrier for updates or ETAs. Small and large organizations have seen investment in digitization or automation, whether that is internal systems, third-party systems or something in between. According to a survey by FourKites, 42% of supply chain executives surveyed plan to invest in further digitization and 37% will invest in the next 1 to 3 years.
With the increase in digitization and automation comes large amounts of data. The volume of the data can feel unruly for a supply chain manager, but it can provide clues into actionable insights for the shipper to take. Data can provide indicators into the performance of carriers, lanes and ports, which allow shippers to make changes for greater operational efficiency.
“One silver lining that came out recently, and it is a hard silver lining for some to recognize, is that the government is now involved,” said Chris Stauber, “The President is actually making statements about the state of the supply chain and specific ports in California.” With global interest in the supply chain, discussion of shippers and carriers investing their profits into infrastructure, technology and digitization is front-and-center. This could result in better uses for data and using that data in meaningful ways. It could also change the way businesses operate. Supply chain costs and delays are now regularly discussed during quarterly earnings calls. If shippers are transporting low value products in containers that cost $30,000 per container, it can be challenging to generate the profit necessary. Cost structures will change the way products are sourced or even which products will be put on store shelves.
As surprising as it is in the current ocean market, there are silver linings that shippers can focus on. As we go into 2022, shippers can focus on the positives and opportunities to minimize their key ocean shipping challenges and allow them to achieve efficiencies and automation in their day-to-day operations. As more shippers realize the need for end-to-end visibility, invest in digitization, focus on actionable insights and the world focuses on supply chains, how will supply chains adapt in the year ahead?
To watch the full webinar, register here.