When shipping goods from one location to another, most people use freight forwarding services. Freight forwarders use different methods of international delivery – mainly flights and boats. These professionals provide their clients with security, insurance, and time efficiency during the shipping process.
However, the global supply chain is currently experiencing countless challenges due to the COVID19 pandemic. Whether you get ocean shipping or move your goods via air freight – you’re likely to experience these supply chain challenges. Freight forwarders do their best to avert these challenges and provide time-efficient services to their clients.
But, certain industry-level challenges are too big for even the best freight forwarders to tackle. Here are some major supply chain challenges that international freight forwarders, in particular, are currently facing –
Rising Container Prices
The containers used to store and secure your cargo are becoming more expensive every day. The cost of routing a 40-foot container from Asia to Europe has increased by $7000 in 2021. From $2,000 to a whopping $9,000. The overall cost of transporting goods from Asia to Northern America has also increased by a whopping 145%.
Rising Fuel Costs
Increasing fuel costs heavily affect freight forwarders. Smart freight forwarders always lower their fuel costs by optimizing their routes. But, optimizing travel routes in such an economic environment is very tricky. Freight forwarders have limited travel options. Labor shortages have made the option of truck-based deliveries too expensive.
Freight forwarders depend on truckers to move their cargo in-between major drayage points. That’s why the shortage of reliable truck drivers is impacting their businesses. Unless the trucking labor force is back to its pre-pandemic levels, freight forwarders will keep facing delays.
The best freight forwarders have always been at the forefront of technology. Unfortunately, the freight forwarders who are still using manual processes and paper-based documents are finding it hard to implement new technologies. Unless you use advanced communication tools, tracking tools, and other software tools to optimize your cargo deliveries – you will struggle.
The high costs of acquiring advanced tracking systems and supply chain software tools serve as major barriers for freight forwarders.
Freight Forwarder Alliances Present a Ray of Hope
The operational costs of freight forwarders are subject to various external factors. Economic shifts in the regions where their shipping lanes intersect can increase or decrease their operational costs. But, having an alliance of fellow professionals to fight on behalf of freight forwarders can be hugely beneficial.
That’s exactly what freight forwarder alliances are. They’re groups of well-vetted forwarders who combine their resources and expertise to help each other out. If you’re a freight forwarder who can’t afford to implement the latest technological tools, just join an alliance. Members of freight forwarder alliances get access to the best supply chain software tools.
For very little membership fees, freight forwarders can use these tools to better manage their risks. If you’re planning to move cargo between different countries, pick freight forwarders who are backed by strong alliances. The global shipping industry is likely to be marred with risks and uncertainties for the foreseeable future. The support of strong alliances helps freight forwarders address these problems.