Foreign Trade and its International Logistics
Opinion and tips on logistics during peak season, post pandemic.
The international scenario of buying and selling across borders has been
facing problems related to logistics, for the movement, distribution,
export, and import of products, goods, and inputs.
Everyone in foreign trade is aware that the freight price in the air mode,
and especially in the maritime mode, included an increase in the order of 4
to 6 times according to the trade/route in question.
The scenario has worsened in recent days with the contamination of port
professionals in Ningbo, China. It is mentioned due to contact with a
certain ship’s crew. The fact is that the consequences, still in their
initial phase, already show reflexes such as the closure of the Ningbo port
and congestion in the Port of Shanghai.
“At present, the global shipping industry can be described as a “two
worlds of ice and fire”. Ports are congested, lack of equipment and freight
rates have repeatedly set records. All companies are faced with difficult
logistics and have to suspend orders.
Affected by the rebound of the epidemic, port congestion in many places has
once again intensified. The current repeated epidemics may cause the global
shipping system to face the biggest crisis in 65 years. The British
“Financial Times” reported that 353 container ships are lining up outside
ports around the world, more than double the number in the same period last
year.
During the epidemic, countries strengthened border control and traditional
supply chains were affected. However, the demand for online shopping from
local people has increased significantly, leading to a surge in maritime
freight volume and ports overwhelming. In addition to the epidemic, the
obsolescence of global port infrastructure is also an important cause of
freighter congestion “. By Ms. Yolanda Wang
To the point: this very complex scenario, especially in the maritime modal,
had as a cause-effect relationship the reduction of space supply, through
the replacement of larger ships (traveling before the pandemic) by ships of
smaller capacity in TEUS (unit of measure for 20-foot containers) in
anticipation of the outbreak. The shipowners’ strategy took into account the
valid premise of demand reduction, but whose attempt to equalize it went far
beyond expectations, as a demand not only decreased but increased. It was
always a crisis that, from the beginning, had a great impact on supply and
never on demand, but…
Taking into account that we are in a period of increased demand, which is
usually in the 3rd quarter of the year, buyers and sellers across borders
must stay tuned so that, in the worst case, they minimize costs, and even
better, they can meet your needs concerning your market and your customers.
In my opinion, some elements can help to reduce the risk of bad financial
employability, as nothing is worse than an unsuccessful disbursement. In
other words, the cargo must be delivered, on time, to serve factories and
dealers, etc.
I point here, some tips based on a functional background. There is no such
thing as infallibility, but rather the presumption that logic must prevail
under the circumstances.
Quick executive decision: at a time when changes in international sea
freight values no longer comply with temporal rules for increase, taking
quick decisions for shipment can make all the difference. In 1 day
everything can change.
Planning of imports: the “Leading Time” contemplated must be extended,
therefore, the logistics must be contracted shortly. Simply tracking the
freight will not change the course of events, as freight will continue to
increase.
How to import minimizing disbursement, with sea freight, while optimizing
processes?
Replace your FCL processes with LCL. <> Meaning up to 30% reduction in
total cost compared. Operational flexibility allows moving goods from one
port to another, often at no additional cost and, therefore, making it
possible to ship as planned, instead of plastering with an stuffed container
in the specific port and without flexibility and at the mercy (subject) of
possible Port cancellations and also see your unit left behind by the
carrier.
Loyalty with commitment. In current times, commitment is essential,
therefore, your logistics operator must be permeated, not for other reasons
just such as price, for example, but for experience, ability to provide
options based on critical analysis of situations and, especially,
commitment, that operator who doesn’t sleep if you don’t sleep, that’s the
“good” one.
How does technology participate in B2B, today and tomorrow?
Technology: New Hub Brazil is part of the E-Freight group, the first to
reply on digital e-commerce applied to international LCL and FCL logistics.
• Decisions are made faster and more assertive.
• Agility and practicality in the day-to-day activities of companies.
Is there a perspective of normalizing international freight Asia-Brazil in
the FCL maritime modal?
Never before 2022. Today’s obstacles will be the same, which will accompany
us throughout 2021.
It is hoped, however, that eliminating some of these obstacles, especially
those such as lack of space and unavailability of equipment, will make 2022
regain some control and organization. This will only be possible through the
supply-demand balance obtained with the entry of larger ships to replace the
current ones.
Kindly,
Roger – Director
New Hub Brazil NVOCC
