January 13, 2022

Challenges in Global Forwarding and How an Integrated Platform Solves Them

Miles Varghese
Miles Varghese
Helping independent freight forwarders/brokers better stay in-sync, collaborate, and improve operations with their shippers/clients. Co-founder & CEO @ Cargologik.com

In the light of global upheaval and unprecedented pressures on the supply chain, the challenges in global forwarding have become all the more focused and scrutinized over the past year. Freight forwarding businesses of all sizes have felt the impact and have had to scramble to adapt and adjust to the current state of the global forwarding industry. Even as recovery continues and things return to a new sense of normalcy, there’s no doubt that the pandemic has left a permanent mark on global supply chains and the freight forwarding marketplace. With 2021 coming to a close and 2022 looming ever larger, there are many challenges still anticipated, which is why more and more freight forwarders are turning towards integrated forwarding platforms as a solution.

Challenge: The Pandemic Continues to Create Uncertainty 

If there was any event in 2021 that summarized the level of uncertainty the supply chain is currently facing with global logistics challenges, it was the Suez Canal blockage incident, but the backlogs at major ports have become synonymous with imports in the run up to peak season. Period. 

Many of the beginning challenges in global forwarding, which many expected to subside after the initial impact of the pandemic, have only grown and become more obvious, impactful, and problematic. A lack of warehousing availability, capacity crunches, driver and shipper shortages, sky-rocketing container rates, higher rates and fees, spiraling expenses and costs,  bottlenecks in ocean, air, and truckload fright, unprecedented port congestion, and increasing consumer demands are the symptoms of uncertainty unlike anything seen recently.

Solution: Integrated Tech Uses Analytics to Forecast Demand

For many forwarders, the answer to these growing obstacles and challenges comes from embracing innovative tools and setting up integrated forwarding platforms. As dwell times at terminals account for more than a 60% increase in transit times for ocean imports from China, it becomes obvious that predictive planning and forecasting are needed within the freight forwarding network. According to FreightWaves data tracking reports, the average transit time for containers traveling by sea is 45 days, compared to 28 days earlier in the year. Port-to-port transit times are averaging 32 days, twice as long as normal. The way to overcome these issues is to embrace integrated technology, employ data collection and analytical platforms, and focus on predictive analytics as much as possible. 

Challenge: Ports Are Looking at More Demurrage Fees

As ports fill up with cargo containers that sit waiting to be unloaded and returned for future orders, congestion is getting to the point that serious integration is needed to prevent even worse bottlenecks. Fees can range depending on the port, the client, the number of containers involved, and other factors. But it is easy to see how this can quickly add up for forwarders and carriers. A single shipment of five cargo containers, charged $50 per day, for five days of dwell time can cost over $1,200 in additional fees. The hope is these fees will get containers unloaded and moved out of ports faster to clear up the tightening bottleneck within the supply chain. But forwarders need to work to avoid these delays in the first place.

Solution: Integrated Systems Provide Insight into Total Costs and Fees

Overcoming the many challenges in global forwarding today often comes back to improving platforms and operating systems to be more streamline and modernized for the digital world. Getting up to date data and information about shopping rates, fees, port delays, backlogs, custom protocols, and the like can make it easier to manage digital freight forwarding services throughout the supply chain. Many ports have announced intentions to begin issuing additional fees for containers that sit for too long after arrival at the port in an effort to clear space and reduce cargo delays. 

Implementing an integrated forwarding platform and database can also help managers better track rates and fees and keep track of trends and shifting market demands. Tracking total expenses, fees, surcharges, and rates can help managers overcome this critical challenge facing the global forwarding market today.

Challenge: Planning for Rolled Cargo is More Difficult Than Ever.

Forbes pointed out in a recent report that the Freightos Baltic Index, which measures global container prices, currently listed more than $10,300 as the average cost per 40-foot container rental. A year ago, a cargo container of the same size cost exporters just over $2,000 to ship. Adding to this growing expense is the added pressure that comes from rolled cargo and shipping delays. 

The challenges in global forwarding now also include balancing the costs involved with paying for capacity and space for shipments that may or may not reach final ports on time and that may sit for weeks or months after arrival due to backlogs. All of this makes dealing with rolled cargo and related expenses all the more difficult for traditional and e-commerce supply chains.

Solution: Integration Increases Visibility of Planned Versus In-Transit Moves

Overcoming the various global forwarding challenges that plague the supply chain today comes down to finding innovative options and integrating platforms, tools, and services that are focused on improving visibility and adaptability. An integrated forwarding platform helps management better track planned routes and shipments while also monitoring and tracking changes made on the fly to accommodate disruptions and issues within the supply chain. Proper planning and predictive insight are vital to supply chain success but equally important are the ability to adapt and scale services as needed on the go. An integrated and digital forwarding dashboard or collaboration platform makes it easier to manage everything and keep tabs on freight forwarding visibility. 

Challenge: Payment Processing is Still Challenging

One of the most obvious impacts felt on forwarding services during these times of change and adaptation is the impact it has had on every facet, from finding containers to loading them to delivering them. According to Rodrigo Gutierrez, CEO of GTM Holdings, “the availability and cost of containers have been a significant issue. To illustrate how challenging this situation has become, there were times where we had to pay US$12,000 to rent a container, making the container cost more than the product being delivered.” With this kind of money being spent right off the bat to simply get cargo moved from one port to another, the need for fast and reliable payment processing services is more vital than ever before. 

Solution: Integrated Platforms Help Track Payments More Accurately

The need for secure, data-backed payment processes and reliable payment tracking and support will help offset some of the strain higher up-front costs can have on freight forwarding companies. With payment processing and challenges in global forwarding mounting on a near-weekly basis, an integrated forwarding platform can help streamline all critical processes so management can track payments, shipments, and status reports in a more effective and collaborative manner. 

Automated delivery notifications, freight shipping monitoring, invoice payment notices, and real-time tracking of payment status can save time and money in the long run by cutting out needless delays, runarounds, and errors during payments. The ability to track and monitor payments more accurately and respond to questions or problems in real-time is easier with an integrated collaborative platform specifically designed for freight forwarding needs.

Challenge: E-commerce is Still Expanding and Stabilizing.

Most people would not be overly shocked that trends over the last two years have shown foot traffic in traditional brick and mortar stores have been much lower than in the past, even for big sale holidays like Black Friday. As highlighted by TechCrunch, while new COVID variants and continued supply chain disruptions keep brick and mortar shops inconveniently inaccessible for many people, the trend of e-commerce shopping is also continuing to change and adapt. 

There will continue to be highs and lows in e-commerce and digital shopping as the slow process of recovery stretches on into 2022 and beyond. While e-commerce shippers and related services are still expanding and settling into a more normal trend, it will still likely be a dominating force within national and international supply chains and is something freight forwarders must be mindful of and plan for.

Solution: SaaS-Based Platforms are Scalable and Adaptable.

The fastest, easiest, and surest way to remain adaptable and to prepare for the inevitable changes within the supply chain and e-commerce shipping is to implement integrated forwarding platforms that are designed to make freight forwarding more streamlined and efficient.  SaaS-based platforms, collaborative dashboards, and cloud-based data access portals make everything more adaptable and scalable. 

In a market where a single day can make the difference in delivery deadlines, optimal monitoring and management of e-commerce transportation and freight forwarding remain critical for forwarders who want to maintain the competitive advantage. Implementing and embracing a freight forwarding software system and tech stack can go a long way in making any freight forwarder more successful in uncertain markets.

Create New Value With the Right Integrated Forwarding Platform for Global Forwarding

With the continued stress and strain being put on the global supply chain, the seemingly endless pressures from consumers and market leaders, and the ongoing upheaval and unprecedented pressures on forwarders, the supply chain network is in desperate need of support. All of the challenges in global forwarding have become more impactful and far-reaching over the past few years as local and global markets alike continue to deal with unprecedented changes. Shutdowns, shipping constraints, supply chain bottlenecks, inventory and warehouse issues, driver and worker shortages, e-commerce crazes, and transportation disruptions continue to impact the entire supply chain network. Even as recovery continues and things return to a new sense of normalcy, few would argue that the pandemic has left a permanent mark on global supply chains and the freight forwarding marketplace. As freight forwarders continue to search for a solution to these growing global forwarding issues, finding the right integrated forwarding platform is more apparent than ever. Contact Cargologik today to learn more and to see what an innovative and integrated platform can do to help address current challenges in global forwarding.

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