Our Expert View: International Freight.
The last 2 years have thrown up many challenges in the international freight market. Some of these were:
- Covid lockdowns impacting freight loading, demand and vessel availability
- The Ever Given Suez blockage causing a backlog in international shipping
- A physical shortage of shipping containers
- The current & necessary sanctions on Russian goods leading to fuel price inflation globally
With the price of international freight currently at a high and storage costs increasing, experts predict this trend will continue into 2023. What are the measures you can implement to reduce the impact of this on your business?
For most large retailers freight is one of the highest indirect costs in their supply chain and the positive effect of implementing changes can be far reaching.
Rob Froome and Marc Chapman FCIPS helped to identify these key points for you to consider when addressing your international freight requirements.
- Container Fill Optimisation. There are multiple ways to address this, however, one of the simplest ways to optimise fill is to consolidate freight requirements across the business. Are there multiple shipments being sent, can these be consolidated? For more complex operations there are software solutions available. These will deliver value but take time to implement and you may benefit from our expert impartial guidance when selecting these.
- Chartering Vessels. This is solution for large volumes. Charter vessels can operate on long term contracts and this is not to be confused with the spot charter market activity that exists and is very unreliable. The port-to-port transit times are also the fastest on the market. As providers have invested in their own container equipment and have stock on hand to satisfy the service equipment demands, this element is also controlled for clients as is UK.
- Explore systems to improve supply chain visibility. Many organisations manage their supply chain through spreadsheets, compiling data to share with their colleagues and other departments. Whilst these have the ability to be easily shared they lack in real time reporting. Supply chains are often unaware of delays or cancellations until goods are due.
- Route your supplies through more economical ports and airways. This may result in slightly longer lead times to transport but if planned in advance can deliver considerable savings.
- Keep close to your suppliers and spread your risk. ideally don’t put all your eggs in one basket. Work with more than one freight provider and keep a close eye on the market and freight rates. Test the market regularly to ensure you are getting a fair price. Ebit has freight experts that can assist if you want support here.
These suggestions can inform a part of your approach to international freight, we are happy to discuss how they can be implemented and demonstrate our knowledge in this area.
Here at EbitIP we are experts in the field of indirect procurement, delivering real solutions – not just reports!. Providing benchmarked and proven savings across multiple categories for many clients we have a track record of innovation and excellence. You can review our case studies around freight and logistics here.
