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Businesses, especially those on the logistics front, have been experiencing the long-lasting effects of the global economic shutdown firsthand. Freight costs are up across the board. FTL is double what it was pre covid, ocean and air freight are 5 times more than it was.. and it’s not looking like it will subside until Q4.
“ We are seeing a super tight supply chain in ships, and in ports, and trucking and warehouses,” Lars Mikael Jensen, head of Global Ocean Network at Maersk explains. “ We are trying to pump more capacity into the supply chain… in all likelihood, this will carry on until the third quarter, “he adds.
From backups and delays at ports to escalating spot prices, there’s no doubt we are in the midst of an inflated market. Covid outbreaks are causing disruptions to the labor forces and the US unemployment rate is at 5.8%, therefore businesses are facing a lack of workers on the field. With a significant GRI already implemented on June 1st, we are expected to see further increases on June 15th and going into July.
“Already sky-high ocean freight spot rates were pushed even higher this week, spiking to new highs on transpacific services with a 25% rise from Asia to the US East Coast taking prices to more than $9,000/FEU, and a 15% increase to the US West Coast – which crossed the $6,000/FEU mark,” according to the latest figures from Freightos.
So, what can businesses do to navigate this market?... OPTIMIZE
Not only can businesses survive this inflation, but they can also even save money by shipping smarter. Now is the time to implement more efficient services and practices. These could be internal or external adjustments. Businesses should start seeing the value in bringing on a 3PL with a top TMS. By placing your transportation sector in the hands of a 3PL, a business can allocate its transportation workers and refocus on other vital parts of the company. At Rock Solid Logistics, we utilize a powerful optimizer that can run 15,000 loads in 15 seconds and come up with 8,000,000 possibilities. In other words, it optimizes your loads really fast and comes up with a variety of solutions; reconstructing partial loads into FTL, for example. This gives us the ability to do LIVE optimization. We can do this in batch at different times of the day, or on the fly! Optimized loads are then sent to the TMS and sent to the carriers. This can be done with all modes of transportation. We have even seen optimized shipping reduce 20% of costs minimally and up to 60%.
For more information visit, www.rocksolidlogistics.com. If you’re interested in hearing more and want to talk to one of our experts on how we can assist with your freight, contact us at 810- 588-4014 or email firstname.lastname@example.org to set up an appointment.