3 International Transportation Trends Impacting Shippers 2018
The emerging landscape of air freight services is witnessing noticeable shifts in the recent years which has had a direct impact on air freight capacity. The booming industry of e-commerce along with the rising demand for efficiency in the operations has already made its way to increased automation and use of technology. Let us check out 3 such international transportation trends that have been directly impacting shippers in 2018:
- Booming e-commerce
There is an evident rising pressure on air freight capacity as the e-commerce space is booming with demand. It is expected that top freight forwarders would negotiate and engage with large shippers, thus providing them with a large chunk of the available limited air freight capacity. This would leave the small and medium-sized shippers facing difficulty to secure air freight space for their needs. This trend is impacting unfavourably to those seeking a ‘ready to ship’ capacity as in the earlier years.
- Consolidation is the way forward
Organizations with the Just-in-Time model or having a lean supply chain who require shipping frequently or shipping out smaller quantities would definitely benefit at large from consolidating their cargo. This trend is seeing wide acceptance by freight forwarders who are now offering services to multiple shippers by combining cargo, and it can mean savings up to 30-50% for the shippers.
- Volatile Rates
The limited capacity will bear more pressure in the event of peak season. Also, there are signals that carriers might create artificial shortages incapacity to push up the freight rates further. This temporary rise in price will be met with lower demands and correct the price. Therefore price volatility can be expected throughout the year. This can be addressed by the shippers through contracting beforehand, fixing prices with both fixed and variable elements, and keeping one ready with alternative options.