News digest. 4 Dec
To find structure in chaos: the need for one digital space that would unite all parties from shippers to forwarders is stronger than ever.
With all the digitalization taking place, shippers start to experience not only the benefits of it but also come across obstacles such as the lack of structure and order in the sea of numerous apps that offer shipment services. Users start complaining that in order to have their cargo delivered, they have to engage with different platforms that, in turn, are in competition with each other, which means that they all want customers’ data and the agreement to it is a very delicate subject. The good news, the solution already exists and it not only solves the problem by uniting the shippers in one digital space but also by being functional and user-friendly. Sensing the new direction of the wind, some companies try to restrict their customers to the use of their platforms but the undermined trust — some clients end up getting discounted offers while others never hear about them — makes it difficult to win loyalty from them. Besides, when spot rates decrease, the big players still stick to the highly elevated rates that only repulses shippers. However, such companies as Maersk, which is almost losing its title of the world’s largest containerline since the mid-1990s, are determined to ruin the rumors about spurning forwarder bookings next year by introducing several types of the agreement for 2022. In the coming year, the company will be focused on direct shipper contact and provision of landside and services package. In addition, the extra volume and availability will also be subject to agreements to tackle the capacity shortage. The letter is essential for the restoration of normality especially when the US ports keep breaking records in handling cargo. Although shippers have found alternative ways of getting their goods to market by air and rail as well as by chattering their own vessels, the recovery is postponed because customers are not switching to services, as it would have been expected. Due to the high demand for goods, interest rate hikes and higher energy costs take their toll on discretionary spending. As for congestion, the Port of LA and the Port of Long Beach finally report significant improvements, in particular related to the environment — the new queuing process has enabled slow-speed-steaming, increasing safety and air quality. The results have allowed the government to report that the US is ready for the holiday rush which is hopeful after such a turbulent season.
On the other side, there are forwarders who are also dissatisfied with the “unreasonable” expectations of their counterparts. Cargo transportation is new torture with all parties involved complaining about each other, especially in the air freight sector. The rates are changing so quickly that for small forwarders it is difficult to keep their allocations on the market. There is a great problem of communication as well: opening-up passenger markets over the transatlantic only reduced the capacity (as it was taken by luggage instead of cargo) and that is something shippers did not understand — a classic “expectations vs reality” case. Meanwhile, the situation regarding air freight rates is not calming. The updates show that the ones from Shanghai to the US climbed 15-20% in November. Europe-US East Coast rates increased 10% over the month to $5.45/kg, with rates to the Midwest and West Coast climbing as well.
With the new German government tapping into responsibilities, the possibility of splitting DB into two entities for the sake of transparency that was lingering in the air for a while has not found its continuation. The company has been criticized for its service and now when the decision of restructuring it is no longer in focus, it has to find new ways for improvement. In the meantime, the New Silk Road has no intentions to be on the lookout for improvement as it is already developing at an impressive pace where the Middle and South Silk Road corridor plays the key role. Their future will be one of the topics for discussion during the upcoming European Silk Road Summit in Amsterdam. The initiative is dedicate to a cross-party forum to promote discussion and investment in all modes of transport across the North of England will also take place in the UK. By the end of the year, it is especially crucial to underline what has already been achieved and what prospects are looming over the horizon. Intermodal development is one of them and there are concerns that the EU is not pushing hard enough. Standardization and digitalization initiatives are named as the primary tools for achieving sufficient competitiveness. Zero-carbon future will also be on the upcoming agenda in Brussels.
