Covid-19 has swept through the world and left life as we know it drastically changed. Many factors within society have undergone huge changes as industries across the globe have been forced to adapt. The shipping industry is the ultimate backbone of global trade, the world economy and the movement of goods we have all come to rely on. With borders closing, the limitations of movement and restrictions of course there have been impacts… but as all shippers know… you can weather any storm with the right plan.
Let us have a look together at three key topics on how Covid-19 is impacting the trade industry:
- How is COVID-19 affecting the shipping industry
- How you can make sure your logistics will run smoothly and efficiently as possible
- What does the future hold for the shipping industry?
How is COVID-19 affecting the shipping industry
The world has seen the huge changes in the past fifty years due to the boom of globalisation. We have been spoilt for choice when it comes to sourcing and stocking goods and products. That has meant that the shipping industry has become the wheels that keep those cogs moving. During the pandemic, we are absolutely and totally dependent on the shipping industry to transport a range of goods and services such as food, medicine, and other necessities across borders.
The shipping industry is dependent on production, factories and warehouses need to be open and operating or cargo isn’t produced. With severe lockdowns and closed factories, the pandemic has put a huge strain on the shipping business as there haven’t been good available to ship.
Back in Spring 2020, the world hit the biggest lockdown and this caused huge issues. There was a reduction in the number of port staff and this then slowed down cargo handling speed resulting in further delays.
In Autumn, world economic activity began to recover. Countries that restarted their production and export volumes saw a steady increase, especially from China to North America and Europe. All shipping lines still operated with fewer ships and all ports with considerably less staff. This caused huge delays and a container shortage, and now the demand heavily exceeded the available supply, so freight rates soared.
These container shortages are causing issues across the world. In some countries, there is an abundance of unused empty containers that can’t leave due to restrictions. In other countries have goods that are spoiling as there are no containers available.
How you can make sure your logistics will run smoothly and efficiently as possible
Here are our five top tips to help you navigate through the effects of Covid-19:
1. Communication Talk to your manufacturer, distributors and customers
Keep in contact with your manufacturer and tell them it is essential they keep you informed on the production schedule and if the production speed is slowing down.
Update your logistics provider also on the situation of your goods in terms of volumes and timescales and inform your customers about any possible delays even before they may be certain to happen.
2. Planning is the key to success
Book your shipments early because of the container shortage. Right now, many logistics partners are unable to make quick short notice bookings. Book as early as possible, preferably a few months in advance, to secure space for your goods.
3. Special cargo… plan more!
Do you have special cargo that will require containers with extra height or more space? Right now, high-cube, open-top, flat rack and other special containers are hard to come by. Make sure you book these months in advance to secure them for your shipment.
4. Prepare for the future it looks rocky
You should also seriously consider having a buffer for peak seasons such as high summer, Christmas, or the Chinese New Year.
Plan together with your manufacturer and ask all the questions about what they will be doing to mitigate the circumstances. Then ask your logistics partner for a reviewed forecast to secure space for all of your goods.
5. Consider the alternatives
Out of the pandemic speed, efficiency and cost were everything. Now, you may want to go with a longer shipment time, or a more costly service if it offers you more guarantees. And even if you don’t want to change… at least have them considered as an alternative if you do encounter any issues.
What does the future hold for the shipping industry?
We are in uncertain times. Waves of Corona are hitting country after country and governments are often responding with lockdowns and restrictions with very little notice. The shipping industry can and will adapt, but there are bound to be delays, headaches and complications. In 2021 we think you should look out for the following as possible issues to the industry:
Container shortages and a lack of space on vessels: This situation looks set to continue well into 2021 and even into 2022. Plan the best you can and be aware that prices will stay high and process time will be slow.
The temporary trade barriers and export restrictions: This situation looks set to continue in 2021 but perhaps easing over the summer months. It will create delays at ports and you may require a significant number of quality control checks as well as new paperwork.
The upgrade in technology: Many manufacturers have turned to a robotic workforce to keep factories open and shipping companies are now following the trend. Automated work means that Corona can have less of an effect so we recommend you stay ahead of the technology curve.
And that is our update from E-commerce Express. If you would like more information on how we can help you with your fulfilment needs during the pandemic and beyond Contact Us and let us help you with all your fulfilment needs. Our staff are here and ready to help you with any question or queries about the 3PL service and what we can do for your business.