PEAK SHIPPING SEASON 2020 - WHAT TO EXPECT

Shipping is in a state of flux, and so are its customers. The industry is currently in overdrive, as shifting demand patterns and supply capacity make an uncertain logistics environment even more volatile. Meanwhile, the global lockdown has thoroughly altered consumer behaviour. This holiday season, for example, more consumers than ever plan to do the majority of their shopping online [1]. Brick and mortar operations are on the brink, and the knock-on effect is being felt all the way down the value chain. 

Q4 is the industry’s traditional peak season, but this year is unlike anything we’ve seen. To turn today’s challenges into opportunities is less a matter of ‘right place, right time’, and more a function of planning, forecasting, and embracing digital as a strategy and solution.


Air Freight Shipping

By August, travel restrictions had reduced belly cargo capacity by 67% compared to August 2019. Lower capacity has led to a rise in rates, yet uncertainty remains. Freighters and charters are working to close the supply gaps, but under-capacity is likely to continue into 2022 [2].

The solution? Focus on reliability over speed, which is exactly what can be provided by ocean freighters. 

As air freight rates rise, ocean services for shipping FCL[3] and LCL[4] look increasingly attractive. Businesses can use a combination of both to reduce their costs and risk.  


Ocean Freight Shipping

Some of the factors impacting air freight can be attributed to challenges faced at sea. Port closures and quarantine restrictions have slowed the movement of goods across borders [3]. A tariff war between China and the US, as well as a broader push for reshoring, are also contributing to a general slowdown [4].

For these reasons and more, ocean carriers have been forced to cut capacity and workforces. This is undoubtedly a period of restructuring for many in the industry. Having the support of reliable service providers and a network of partners will be critical during this period [7]. 


The Value of Digital Freight Forwarding

The disruptiveness of 2020 has helped digital freight platforms gain popularity. They offer a proven model to streamline operations, saving businesses time and money. 

While traditional freight forwarding requires visiting warehouses and in-person communication, digital forwarding solutions help avoid health and logistics risks. A technology-first approach can also reduce pressure on workload and workflows in fundamental ways:  

  • Automated shipment tracking: Real-time tracking and updates for clients and freight forwarders on their shipments. Customers can track their cargo movement in real-time using our Route Planner service.
  • Instant price quotes: Customers can get instant freight quotes and comparisons from other freight forwarders. SeaRates Online Freight Marketplace allows you to see the best market rates depending on the type of shipment.
  • Smart documentation: Smart forms can simplify workflows and save customers time. And given the current context, secure cloud access eliminates much of the hassle of physical paperwork. 

There are a number of other benefits, many of which reduce rather than shift cost. API integrations, for example, can bring freight forwarders closer to customers and their own operations while foregoing IT development and maintenance costs -- simple measures that yield dramatic results.   


Outlook on Q4

With the industry and economy still adjusting to 2020, we can expect the pandemic to continue being a disruptive influence. However, November will be a big month for retailers and shippers alike. AliBaba’s ‘Singles Day’ has become a global phenomenon, followed by Black Friday and Cyber Monday. The launch of products like Apple’s iPhone 12 and Sony’s PlayStation will only help retail sales [7]. 

The industry will have learned many lessons from Q2 2020’s supply chain disruptions and will use that knowledge to build operational resilience. Supply chains are already more flexible, and service providers continue to strengthen their digital services to support the industry. 

In this context, Q4 2020 is more than peak season; it is another pivotal moment in the industry’s transformation story.  


Sources: 

  • JOC
  • IATA
  • Stalawfirm
  • carnegieendowment.org
  • logisticsbrief.com
  • ttnews.com

Lilia Khovrak is a professional content manager from Odessa, Ukraine. Loves life by the sea. Dreams to see Paris and eat a croissant on the thresholds of Notre Dame de Paris. Hates to read meaningless articles.


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