The great challenges facing seafreight

Since early 2020, COVID-19 hasn’t just been having an impact on us all as global citizens, it has also affected the logistics market. It wasn’t possible to load ships in China because so many factories closed their doors and domestic transport was temporarily suspended This resulted in a severe imbalance in trading worldwide. E-commerce, however, boomed, as we all stayed at home en masse. Companies, retailers, and consumers started to hoard and order online. This resulted in no less than 20% more shipments than usual, which put pressure on the global market.    

Huge demand for products
The global pandemic has also affected the overseas market between Asia and Europe, and between Asia and America, so customers on the route between Asia and Europe are having to deal with higher fares and fewer carriers sailing to Europe. The enormous demand for products has also limited trading between Asia and America, and made it much more expensive. America, a major consumer, is better off looking for suppliers in Europe. As a result, Europe-America trade is following the trend that started with Asia-America trade; it’s becoming overcrowded, causing rates to skyrocket and limiting the options.

As a logistics service provider, we faced a major challenge. How do we deal with the constantly changing situation and rates? For Seacon Logistics, customer contact has always been the most important aspect. We like to think in terms of solutions. As Export Overseas Operations Manager, I’m constantly mapping out all the options, monitoring the situation on a daily basis, consulting with our customers, and proposing efficient solutions. Depending on the customer's wishes, the product, and the recipient's need, this can sometimes mean a different mode of transport. On the other hand, a customer could also choose to store goods a little longer and ship them later when the pressure on prices has eased. 

Extra pressure on shipping traffic 
Global shipping traffic also suffered extra pressure in March 2021 due to the obstruction caused by a stranded container ship in the Suez Canal. The congestion in one of the most important waterways in the world led to problems around the globe. Although the export situation quickly recovered to normal after the vessel was set free, the ship remained anchored for weeks in the Great Bitter Lake in Egypt. A final compensation agreement has now been reached, and the ship is once again sailing the seas. 

In late May 2021, a COVID-19 outbreak led to the closure of the terminals in the seaports of Yantian, Shekou and Nansha in the southern Chinese province of Guangdong for various weeks. These ports are opening again, but it’s expected that clearing all the backlogs will take weeks. The after-effects of the paralysis of the ports, which lasted several weeks, will be felt in the logistics chain for a long time to come.

These situations expose bottlenecks in world trade, which have resulted in capacity problems and an unprecedented increase in ocean freight rates. Personal service, good communication and customer-centric solutions are essential in all these circumstances. We’re keeping customers updated about the situation on a daily basis, and doing everything we can to find appropriate solutions for the logistical challenges by thinking out-of-the-box and monitoring customer needs. By deploying the expertise of our staff, communicating clearly, working together more closely internally, sharing knowledge, and offering customer-centric service, we know exactly how to respond to the needs of our customers. This is where we really make a difference. 

3 August 2021

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