Supply Chain Disruptions

The holiday period is notorious for supply chain disruptions. Increased traffic on major shipping lanes like the English Channel and the Baltic Sea routes leads to congested routes, increased transit times, and delayed deliveries.

Freight forwarders must be skilled at responding to these disruptions, which often require the implementation of contingency plans. These plans may include rerouting shipments through different routes, such as the Cape of Good Hope or the Northern Sea Route. Another strategy is to utilize different carriers, which involves switching from sea to air freight to ensure timely delivery. Additionally, increasing stock at key locations in Europe, such as Rotterdam, Antwerp, and Frankfurt, or working closely with suppliers to adjust delivery schedules can be effective.

Increased Risk of Theft and Loss

The risk of cargo theft and loss significantly rises for freight forwarders due to the high volume and value of goods in transit. This period sees a surge in shipment of high-value goods like electronics and luxury items, which attract thieves. Thefts frequently occur at transit points such as less-secured regional warehouses, unsupervised loading docks, and remote truck stops, particularly when vehicles remain stationary for prolonged periods.

To enhance security at warehouses, forwarders can use tamper-proof locks, reinforced security doors, security grilles on windows, and bright, motion-activated lights. Loading docks can be similarly fortified with continuous monitoring by cameras equipped with night vision.

Customs and Regulatory Challenges

During the holiday season, high volumes of imports and exports lead to longer processing times in European customs departments. Delays are especially prominent in countries like Germany, France, and Italy, with strict import regulations. These delays often occur due to documentation errors, as customs authorities rigorously check for compliance with safety regulations and tariffs. Additionally, delays can arise from regulatory updates and subsequent periods of adjustment where both customs officials and forwarders adapt to new requirements.

Building relationships with customs officials is also important for efficient processing. The use of experienced customs brokers can be helpful, especially in countries where strict EU trade and safety regulations apply. This approach simplifies navigating customs procedures and ensures prompt clearance of goods.

Impact of Winter Weather on Logistics

Adverse winter weather often disrupts transportation during Europe’s holiday season. Snowfall in the Alpine regions affects countries like Switzerland and Austria and can block major trucking routes. Dense fog in northern countries, including the Netherlands and the UK, may disrupt port operations and delay sea freight.

Freight forwarders can respond by using predictive analytics for route management, increasing inventory buffers at key locations, and prioritizing rail for critical shipments. These measures, along with detailed contingency plans, help maintain timely deliveries amidst the seasonal surge in demand.

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Cybersecurity Risks

The key to managing cyber threats is implementing robust cybersecurity measures such as introducing secure digital platforms, strict access controls, and regular updates to security protocols. Additionally, logistics providers can monitor the supply chain for potential risks by using artificial intelligence or blockchain, enabling them to respond to suspicious activity and minimize impact.

Political Instability

There are a number of strategies to help mitigate political instability risk, including diversifying transportation routes, monitoring the situation, and developing contingency plans. If a certain country or region is experiencing political instability and unrest, freight forwarders may choose alternative routes to avoid supply chain disruptions. For instance, if the land route through a specific country is deemed high-risk, they may opt for sea or air transport instead. Also, keeping a close eye on the situation in regions where they operate helps European logistic providers adjust their strategies. This can involve using technology to monitor for social unrest, road and border closures, and other disruptions and maintaining communication channels with local players. Third, in the event of a political crisis, logistics providers need to have a contingency plan in place to minimize potential risks. This could include strategies like identifying backup storage facilities, working with customers to reduce inventory levels, and using alternative routes or modes of transportation.

Natural Disasters

Logistics providers face significant risks from floods, earthquakes, hurricanes, and other natural disasters, which can disrupt transportation networks, cause long delays, and damage cargo. To mitigate risks, European freight forwarders can implement different strategies that can help them respond to potential disruptions. One such strategy could be carrying out risk assessments to detect potential vulnerabilities. This could entail identifying routes that pass through flood-prone regions or warehouses found in areas with a history of earthquakes.

Investing in technology can also help mitigate risks associated with natural disasters. Real-time monitoring and tracking systems, for instance, can provide early warnings for earthquakes, floods, and hurricanes, enabling logistics providers to take proactive measures. In addition, monitoring systems can help forecast the impact of natural disasters by using weather and historic data analysis, risk modelling, and real-time data collection. This can help freight forwarders adjust their strategies in real time to minimize disruptions. Lastly, as damage due to natural disasters is sometimes inevitable, logistics providers can offer customers insurance coverage to help protect them from financial loss. Some of the common types that freight forwarders can offer include business interruption, cargo, and marine insurance.

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Supply Chain Disruptions

Supply chain disruptions can occur for a number of reasons, including labor strikes, political unrest, and natural disasters. Floods, hurricanes, earthquakes, and other natural disasters can cause power outages and damage to transportation infrastructure, resulting in delays and costs for freight forwarders. Political instability in the form of government changes and civil unrest can lead to production shutdowns, border delays, and port closures, thus causing supply chain disruptions. Similarly, supplier issues, including production delays, bankruptcies and insolvencies, and quality issues can disrupt the smooth flow of goods. As pandemics can cause production shutdowns, lockdowns, labor shortages, and transportation disruption, they can affect the supply chain.

Changing Market Conditions

Changes in market conditions can affect the logistics industry, including recessions, fuel prices, transportation infrastructure, and changes in global trade policies. The availability and quality of infrastructure, such as airports, highways, and ports, can have a significant impact on freight forwarding businesses, causing sub-quality service levels, delays, and higher costs. Changes in trade policies can also affect forwarders, including trade restrictions and changes in import and export regulations, duties and tariffs, and trade agreements. Lastly, economic conditions can affect freight forwarding operations, including currency fluctuations, price of transportation, and demand for shipping services. During economic downturns and recessions, for example, demand for shipping services decreases, leading to increased competition and a reduction in revenue. This can force freight forwarders to cut costs or downsize to remain profitable and weather the downturn.

Environmental Sustainability

Logistic companies are faced with an increased demand for environmental sustainability, including the adoption of green practices and sustainable modes and methods of transportation. Green practices help forwarders minimize their environmental footprint, enabling them to maintain a reputation for corporate social responsibility. Such practices include using energy-efficient equipment and digital documentation, consolidating shipments, and optimizing routing. Forwarders are also increasingly adopting sustainable modes of transportation, like hybrid and electric vehicles, which help reduce emissions.

Communication and Collaboration

Freight forwarders face a number of communication and collaboration challenges such as time differences, language barriers, cultural differences, and information management. They speak different languages and work with producers, suppliers, and customers with various backgrounds which can result in misunderstandings, errors, and delays. Shippers also operate in different time zones which makes communication in real-time difficult. This can result in delays in responses, exchange of information, and decision-making. Forwarders are also tasked with managing huge amounts of information and paperwork, including invoices, customs forms, and other shipping documents, making it difficult for everyone to access the right type of information. Lastly, there are coordination challenges because forwarders need to coordinate the movement of cargo with customers, carriers, and suppliers to ensure safe and timely delivery.

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In an attempt to keep the virus in check, the authorities have kept on prohibiting crew changes for non-Chinese nationals and recently introduced a 7-week quarantine for Chinese cargo ship crew. Commercial vessels that made crew changes at other ports of call should wait for 2 weeks before they are allowed to call at a Chinese port.

New Measures and Impact on Global Supply Chains

To comply with the new measures, carriers have been forced to delay crew changes and cargo shopping and to reroute vessels. According to ship owners and freight forwarders, China’s Covid-19 zero policy has an accumulative impact on cargo flows, causing global supply chain disruptions.

China is not only the world’s biggest exporter but also a major commercial and shipping hub. That is why, the newly imposed strict measures have had a profound impact on global cargo flows. To illustrate China’s extreme tactics, recently, the local authorities locked in as many as 34,000 Disneyland visitors in Shanghai for mandatory Covid-19 testing. Even people who tested negative have been asked to self-isolate and be retested in 14 days. What is more, China has now extended the definition of close contact to anyone who is one kilometer away from an infected person.

An added problem is the fact that policies change often in response to the local situation. Also, China recently announced that no easing of the rules is soon to be expected.

Not Letting Crew In

While China has been doing a good job at reducing the spread of Covid-19, this is done at the cost of not allowing maritime crew in. Even Chinese crew may not be allowed to enter China under certain circumstances. Non-Chinese crew with emergency medical needs are not allowed to leave the ship to get much needed care. One carrier reported an instance where a chief officer had a serious tooth abscess and wasn’t allow to leave the ship to get care.

International freight forwarders have also been forced to keep Chinese crew onboard past contract expiration. In line with official regulations, no more than 3 Chinese crew are allowed on a flight to the mainland. Some seafarers have been stranded onboard vessels for over 11 months, which is the maximum maritime crew is allowed by law.

Impact on Carriers

Major carriers say the increasingly radical policies have made it a challenge to operate in China. In some cases, delays are not an issue but in others, delays could go on for days on a row. Some carriers have already incurred late fees for having to reroute.

One of the biggest owners of oil supertankers recently reported to have spent millions in handling disruptions caused by increasing costs, quarantines, and rerouting.

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Delays in Unloading Cargo Vessels Cause Shortages

The delays in unloading ships can jeopardize the holiday season, with parents not being able to buy presents on time to tuck under the Christmas tree. In this scenario, toys could stay on shelves for months with clearance stickers.

Toymakers warn that they are already low on supplies and only able to meet about 65 percent of orders. While some had anticipated a significant growth of up to 50 percent, they now expect sales growth of about 20 percent.

Toy manufacturers are struggling with significant bottlenecks in the transportation pipeline. To begin with, the cost of shipping containers has skyrocketed from $3,200 to $20,000. And even when containers are shipped to the final destination, there are shortages of truck drivers to transport shipments.

Experts explain that it is a complex set of problems, from resin shortages and widespread power cuts in China to growing labor costs that have a chain effect. It seems that we will be struggling with the after-effects for a long time.

Toymakers Struggling to Save the Season

Truly, big businesses have more resources than small ones that are struggling to survive. Costco and Home Depot, for example, chose to contract container ships to speed up orders. Big companies also have the financial resource to place orders months in advance and secure continuous supply.

Some businesses are shipping inventory to alternative ports while others are flying cargo to expedite delivery. Still others are leaving shipments behind and hoping for costs to come down before the holiday season.

Yet, even large companies like Hasbro expect that some toys will not be shipped before the fourth quarter. And in addition to a more limited product range, customers are faced with price increases. Adding to the complex set of factors is that retailers have been forced to place bigger bets on even small shipments to cope with product shortages. It is basically the same strategy they used for the back-to-school season, resulting in higher prices and fewer choices for customers.

Toy makers say they don’t expect price increases by more than 10 percent despite the fact that this will not cover shipping costs. For them there is a lot at stake, especially in markets such as the U.S. and China, as they heavily rely on Christmas sales.

Pandemic-Driven Demand

Experts also point to the fact that consumers are increasingly looking for products that were most-loved during outbreaks and lockdowns. Such are, for example, Frozen, Paw Patrol, Grogu, and Batman. Parents are also shopping for items that encourage sensory and exploratory play, including Legos, water toys, and kinetic sand. Yet, in all likelihood, they will be faced with squeezed supply and a more limited variety.

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Shipping by Railway

Giants like Ikea have been shipping cargo by railway from China to Europe, using temporary warehouses for storage and distribution. Ikea has invested in intermediate warehouses across Asia, in countries like Thailand, Indonesia, India, Vietnam, and China.

Data Automation

Automated checkpoints have been installed at major ports such as Gothenburg in Sweden, scanning all containers unloaded at the port. Automation has reduced idling times by about 30 percent. The automated gates come with optical character recognition that can read check seals, warning labels, and container numbers, shortening truck turn times to 25 minutes. In contrast, average turn times are 56 minutes in the rest of Europe. The automated terminals at Gothenburg have doubled available port capacity and enabled 24/7 service.

Building New Ships

It takes about 2 to 3 years to build new commercial vessels, so any cargo ships commissioned now will not be able to ease the supply chain crisis in the short term. Shipping experts also explain that commercial vessels are expensive, costing up to $200 million apiece. Ordering a dozen of ships can be a costly mistake if carriers would only need them in the next couple of years.

What is more, commercial vessels have become bigger over the last decades, with some carrying about 24,000 containers onboard. The problem with big ships is that they need huge cranes and deep, large ports to dock. There is a limit to where giant ships can call. An added problem is the fact that big commercial vessels require significant resources in terms of port staff and warehousing. According to shipping experts, a better solution could be to invest in medium-sized vessels that could improve port processes by ensuring a more continuous flow of cargo and containers. Small ships carrying 14,000 TEU boxes instead of large ones carrying 20,000 TEU could reduce shipping times and accelerate transport. Smaller vessels also ease strain on road transport, shipping cargo by truck, train, and feeder vessel. Besides, large ships are only used to move cargo from Asia to Europe, calling in multiple ports to load containers before sailing to Europe.

Rethinking Business Models

So far businesses have been over-dependent on single factories thousands of miles away from production facilities and retail locations. This approach saves money and warehousing space but relies on supply chains always functioning as they should. According to economists, it is also time for consumers to rethink their shopping habits and behavior. Responsible consumption can help ease global supply chain strain.

The post Long-Term Solutions to Ease the Overworked Global Supply Chain appeared first on International Forwarding Association Blog.

Why Is Data Integrity Important?

Shipping mission-critical items such as vaccines is challenging but Covid-19 vaccine delivery has proven to be especially tricky. One reason is the large volume of doses that have to be transported quickly from manufacturing facilities to hundreds and even thousands of locations worldwide. Coordination with cold-storage capabilities is crucial because of the vaccines’ short shelf life.

Here is what data integrity involves for vaccine shipping – location intelligence, integration, enrichment, and quality. Location intelligence, for example, enables logistics companies to identify connections between thigs, places, and people and what happens there. This is especially important in remote and rural regions where supply chain disruptions are a source of concern. To complete the last mile, shippers need real-time data such as traffic along different routes, road restrictions and conditions, weather, and loading dock locations.

Enrichment involves the use of additional sources of information such as cold-storage capacity at delivery destinations. Without such data, vaccines may end up in a facility that has no room for additional doses. Integration is a third component which is crucial for decision-making support. It allows shippers to access information such as exactly when to deliver, where vaccines need to go, and which is the most efficient, safest, and quickest route. Finally, when it comes to quality, information must be consistent, timely, accurate, unique, and complete to ensure proper shipping and management.

Data Integrity Prevents Vaccine Waste

It is important to track metrics when shipping vaccines as to prevent waste, especially when it comes to time-sensitive products. Temperature deviation not only degrades certain pharmaceutical products but can make them harmful for human health. In fact, temperature-controlled transport is required for a significant number of shipments. Overall, passive cooling solutions are used for about 75 percent of deliveries while 20 percent of shipments need active temperature control. Passive solutions are easier and less expensive to implement. As some vaccine varieties require active control, it is important that shipping companies achieve data integrity to prevent vaccine degradation. As data by the International Air Transport Association shows, around 25 percent of doses get wasted due to inadequate temperature management. This makes proper handling essential to protecting population health and saving lives across the globe.

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Under the recently imposed restrictions, all truck drivers are required to present a negative Covid-19 test, which is likely to have a significant negative impact on trade flows. Borders are open but the green lanes have thus been closed, with the Czech Republic and Austria introducing similar traffic restrictions.Impact on Traffic

While both negative PCR and rapid antigen tests are accepted, drivers are allowed to enter only if tests have been conducted by an authorized laboratory. This requirement is difficult to comply with on the part of drivers working in another EU Member State. Previously, transport workers were exempt to help avoid supply chain disruptions and delivery delays.

Experts stress on the importance of test exemptions which facilitate road transportation during a pandemic. If the Czech Republic, Tyrol, and Germany choose not to reintroduce exemptions, this can have a significant impact on the single market. The reason is that these crossings are at major EU traffic routes, with over 7,000 trucks crossing borders and using the corridor through Tyrol on a daily basis. About the same number of vehicles are moving on the Dover-Calais corridor every day. Significant disruptions were reported when France introduced similar measures last December, requiring professional drivers to present a negative Covid-19 test.

The traffic authorities recently announced that a 15-km queue had built, with trucks waiting to pass through the Rozvadov-Waldhaus crossing between the Czech Republic and Germany. The queue at the border between Tyrol and Italy – the Brenner Pass – is 5km long.

The EU Response

Logistics experts stress on the fact that truck drivers are at a low risk of infection as they observe strict safety protocols, in addition to being isolated in their cabin. They also comply with social distancing measures such as no physical contact at delivery and pick up locations. The view of the EC’s Transport and Mobility Commission seems to be in line with the position embraced by many European logistics companies. According to Henrik Hololei, Commission Director General, unilateral measures place an undue burden on the shipping industry. In fact, last week the EU asked Member States to bring their regulations in line with the recommendations on travel restrictions. All EU Members have been sent a letter advising governments to abstain from implementing new border measures. According to EU officials one possible solution for Member States is to adopt digital certificates that would facilitate cross border travel. In line with this, Commissioner for Justice Didier Reynders stated that the Commission is not discussing the option of making vaccination certificates mandatory.

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Ports That Already Make Use of Automation and Digitalization

The Port of Rotterdam has already introduced digital tools to reduce costs, improve safety, and ensure efficient workflow. Software tools speed up handling of inland vessels, trains, and ships. There are also tools for traders, freight forwarders, and shippers that help improve logistics chain efficiency.

PortXchange is one example and a digital solution for terminals, agents, and shipping companies. It allows operators to monitor, carry out, and plan activities with the help of standardized data exchange. In essence, this is a shared platform that allows users to access information such as stay, departure, and arrival of ships. Operators benefit from increased cargo volumes, better predictability, clear communication, improved terminal occupancy, and reduced carbon dioxide emissions. Benefits for shipping companies include reduced charter and bunker costs and better call turnaround times.

Other ports such as the Port of Gothenburg and Port of Hamburg are already making use of automation systems and digital tools such as automated terminals, automated guided vehicles, 5G, and sensors for multiple data streams.

Increased Digitalization

Ternvag chief officer Johan Östlund stated that contact with service technicians, pilots, and other key crew must be kept to a minimum due to their vulnerable position. Communication mainly takes place through email exchanges and computer systems to maintain social distancing. Many ports across the globe have also reorganized processes and routines and are now using digital tools. At the same time, once ships call in, a number of interactions take place such as inspecting notices, safety checklists, permits, and quality of cargo. To this end, the Port of Gothenburg has already introduced systems and tools that allow for increased digitalization and automation and help minimize contact. Automatic gates for trucks have been installed at APM terminals to minimize physical contact and improve efficiency in processing sea freight in Europe. The port also plans to introduce digital systems for event prediction, trend identification, and data-driven decisions.

Future Developments

In the coronavirus aftermath, ports are likely to introduce and make greater use of automated systems and digital tools that will replace manual handling and paper-based processes. EagleRail Container Logistics is a point in question when it comes to port automation, making it possible to digitize and automate movement of short-haul containers. Robotic technology has been developed to replace drayage trucks and improve efficiency.

Some challenges remain with regard to data processing. There is need for solutions to harmonize vessel and crew data, cargo formats, and data sheets as some of the current routines and practices result in increased workload and paperwork and loss of productivity.

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No matter the size and type of a business, every company wants to grow and expand. This can mean expanding in your town, in your country or internationally. The companies from the International Forwarders Association are experienced enough to help all types of organizations buy, sell, deliver and store any type of good or cargo. Professional logistics companies like the list of logistics companies from IFA can help reduce the cost as well as the time you would normally spend for moving good and cargo from one point to another.

The members of the freight forwarder association are specialized in ensuring effectively organized transport for any need, in order to meet the customer demands and expectations for getting the best logistics service at the best price and with the promptest delivery.

In order to provide the best international freight services, storage, and distribution services as well as to transport small shipments or complete loads, the companies from IFA work on improving the supply chain by limiting and if possible avoiding the waste of time or materials necessary for the transport services.

What are the important features which the logistics services add to the supply chain

The Logistics services provided by the freight forwarders can create value

Adding value to the service provided to an end client, includes not only providing the right quantity of the quality products in demand but also ensuring the products in demand are available whenever they are needed. The companies from the freight transport association help improve businesses by ensuring that the products are available upon demand. This can be done via contract logistics, storage and distribution management systems, as well as highly efficient logistics services.

Logistics can help improve the efficiency and lower the costs

Thanks to the boost of International trade, the services provided by the international freight forwarding companies have developed close business relationships with businesses. By offering the organizations services including transport, storage or distribution, the European logistics companies help improve the overall efficiency of these businesses as well as help reduce the cost of these services and thus help them offer their products at the best price and with the best delivery terms as possible and in a timely manner.

These are just a few of the reasons why the list of logistics companies from the European network of transportation play such an important role in the overall supply chain and in the overall business success and profitability. Logistics plays a part in helping businesses expand, grow their reputation, get ahead of the competition, as well as be able to answer to the increasing demands of the end customers.

This is why the business owners of small and large companies are working in close cooperation with the trusted logistics companies from the International freight forwarders association.

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