As ocean carriers work to improve customer service while preparing themselves for the new low-sulfur fuel regulations, end-to-end logistics providers help to fill in the gaps and make sure ocean shipments get to the right place at the right time.
Navigating the complexities of ocean freight isn’t easy for individual shippers, many of whom lack the economies of scale and buying power needed to secure the best routes, get the best possible rates, and arrange the most favorable terms.
And while ocean carriers are reportedly shifting priorities in order to meet their customers’ demands for better service—including new offers like premium service, guaranteed loadings, faster unloadings, and guaranteed transit times—global supply chain management still presents high hurdles for most importers and exporters.
The good news is that by working with a reliable, end-to-end logistics provider, companies can significantly reduce the learning curve associated with ocean freight while streamlining their supply chains and focusing on what they do best: running their businesses. Here are four other reasons for working with an end-to-end logistics provider to manage your ocean freight:
- Effectively navigate the changing regulatory environment. Trond Prestroenning, Executive Vice President, Ocean Freight Americas at DB Schenker, says IMO 2020 will be one of the biggest topics of interest to the ocean shipping community this year, mainly because the industry has one of the highest oil consumption rates among all transportation modes. As with any new regulation, the new rules also pose some new challenges for the ocean shipping industry to overcome—and without doubt – some cost impact for shippers. “Our strategy is going to depend on what the ocean carriers and ship owners themselves are going to do (i.e., to offset related surcharges, which will be instituted per container or TEU), and that’s not immediately clear yet,” says Prestroenning. “Once those strategies are in place, we’ll put a plan in place for helping our shippers navigate through the impacts from IMO 2020.”
- Whittle down the number of providers you have to work with. An end-to-end logistics provider can take your shipments from Point A to Point B while also enabling other key functions (i.e., warehousing, Foreign Trade Zones, etc.). The more providers you work with, the bigger the gaps in your supply chain. To achieve maximum efficiency, pick a reliable, single-source provider that can solve all of your most pressing pain points. “End-to-end providers are beneficial if you require full supply-chain support. They’re able to review all of the processes involved in distribution and use their knowledge to reduce cost and increase speed to market,” SupplyChainBrain points out. “These providers are able to view all of the processes involved in the distribution process, and use their expertise to create efficiencies across the entire supply chain. They can leverage cost across multiple services such as drayage, warehousing, and outbound distribution, resulting in lower costs and a better balance of needs.”
- Identify important trends before they happen. For the year ahead, expect to see some new constraints on the demand side, namely in terms of ocean container space. “With all of the new alliances reshuffling capacity, and in light of IMO 2020, we could be looking at a fairly unstable market in 2019,” Prestroenning says, “which could lead to some price or rate volatility.” To offset these challenges, shippers should align themselves with large, global freight forwarders/NVOs such as DB Schenker that have the bandwidth to offer services across all carriers/alliances, and with extensive trucker networks. “Shippers should keep close to the experts in the industry, align with reliable partners, and try to keep their fingers on the pulse of what’s going on,” Prestroenning says. “That way, there will be fewer surprises and more successes.”
- Go beyond the ocean. There’s more to shipping ocean freight than just the time that cargo spends on the water. Shippers also have to coordinate the land transportation, warehousing, customs paperwork, and myriad other details that go into successful overseas transport. “An effective [logistics provider] takes a strategic approach to network configuration and helps you determine the right distribution center locations for optimal efficiency for your current and future business,” Inbound Logistics “They’ll have a network of conveniently located facilities—and the ability to open new locations to meet your specific needs.”
As ocean carriers work to create a more favorable customer experience and adjust their operations to comply with new regulations like IMO 2020, shippers should choose competent logistics providers who can handle their end-to-end supply chains in the most seamless and cost-conscious manner possible.