Air and ocean freight have always been complicated, but recent events have made shipping even more challenging. Luckily, there are a few trends emerging that might make your importing business a bit easier. From new technologies streamlining the shipping process to shifting trade routes and opening up more options, 2023 is poised to bring some big changes to the world of logistics. Read on to find out what the experts are seeing in the air and ocean shipping sectors and how these trends could impact your business.
5 Key Trends in Ocean Freight Shipping
- Lower Demand In Ocean Shipping & Delays Are Still Common
The pandemic threw global shipping into chaos, and the effects are still being felt. Delays, shortages and higher shipping costs are common, especially for ocean freight. Demand for shipping containers and cargo space on massive ships has dropped with reduced global trade. Fewer vessels are sailing, and those still operating often run behind schedule.
Congestion at major ports is improving but still an issue, leading to anchorage and berthing delays. Once docked, getting cargo unloaded and cleared through customs also often takes longer. The huge volume of e-commerce has strained port infrastructure, and COVID-19 precautions have slowed some procedures. When shipping does resume its normal pace, rates may remain elevated due to fuel costs and companies recouping losses.
The shipping industry is working to address problems, upgrade technology and improve efficiency. But for now, lower demand, continuing delays and higher prices are real possibilities if you’re moving goods overseas. The key is planning ahead, building flexibility into your supply chain, and budgeting for potentially rough seas.
- Be Ready To Shift Ports As Needed
Ports are major shipping hubs, but they’re also vulnerable to disruptions outside of anyone’s control. If there’s a natural disaster, labor strike, or other issue impacting operations at your usual port of call, you’ll want a backup plan to redirect your cargo.
Stay in close contact with your carriers and logistics providers. They’ll have the most up-to-date information on port conditions and can help quickly shift your cargo to a new port if needed.Review force majeure clauses in any contracts to understand your obligations during an unforeseen disruption. You’ll want wiggle room to divert to alternate ports without penalties if your primary port is immobilized.
Consider building more redundancy into your supply chain by using multiple ports regularly for cargo transport. That way, you have established operations at back-up ports if your primary port faces delays or closures.
- LCL Shipping Is Still A Key Strategy
While massive mega-ships might get all the hype (FCL shipping), for most businesses LCL shipping will continue to be crucial for reaching customers and keeping costs in check.
As a small or mid-sized business, LCL shipping likely makes up a good portion of your logistics operations. For 2023, keep using this tried-and-true method, but look for ways to streamline the process. Work with a freight forwarder that specializes in LCL to handle the consolidation and documentation for you. They can find the best rates across air and ocean carriers.
Also consider banding together with other similar businesses to negotiate better LCL rates. The more volume you can provide collectively, the lower your per unit shipping costs will be. You might also explore co-loading space in a container, where you share with non-competing companies shipping to the same port of entry.
- Multimodal Transport Brings Cost Savings
More companies are adopting multimodal transport, using both air and ocean freight to move cargo. By combining these methods, shippers can benefit from the speed of air freight for time-sensitive goods as well as the lower costs of ocean shipping for high-volume, low-value items.
For time-critical shipments from China, air freight is ideal for getting products to their destination as quickly as possible. However, for large volumes of goods, ocean shipping reigns supreme due to its significantly lower shipping rates. By using multimodal transport and splitting shipments between air and sea, companies can optimize costs and transit times.
Businesses can effectively lower their transportation costs by utilizing rail freight services for long-haul routes from China to Europe and switching to trucks for shorter distances within the domestic market. For maximum cost efficiency and flexibility, multimodal transport is the way of the future.
- Shipping Strategies Must Change As Your Supply Chain Does
As supply chains evolve, so too must shipping strategies. With increasing globalization, new trade routes are emerging while old ones fade into obscurity. Forward-thinking shippers will adapt their strategies to match the flows of goods. For example, as manufacturing hubs shift, shipping lanes may need realignment. If production of certain components moves from China to Vietnam, shippers will need to pivot to serve factories in Ho Chi Minh City rather than Shenzhen. Companies that are slow to reroute may face logistical difficulties and higher costs.
On the other hand, international shippers that are quick to optimize new routes will gain a competitive advantage. Finding the fastest, most economical shipping lanes and transportation modes will be key to success in the changing landscape. Shippers must make data-driven decisions to choose routes that balance cost, speed, and reliability.
5 Market Trends in the Air Cargo Sector
- A Shift Of Cargo from Air Freight To Sea Freight
The cost of air freight has increased significantly over the past few years. Fuel prices are volatile and air cargo capacity is still limited, driving rates up. At the same time, ocean freight rates have stabilized and transit times have improved. This has led many shippers to shift more of their cargo from air to ocean transport.
- Increased Air Cargo Capacity
Air cargo capacity is increasing in 2023 due to airlines adding more dedicated freighter aircraft to their fleets. Major carriers like FedEx, UPS, and DHL have hundreds of planes scheduled for delivery over the next few years. With e-commerce continuing to drive demand for fast, efficient shipping, the air cargo industry is poised for significant growth.
- Hike in Air Shipping Rates
Air freight rates are projected to continue increasing in 2023 due to lower demand and increased capacity. As fuel prices rise, airlines pass on surcharges to shippers. Fuel accounts for a major portion of airlines’ operating costs, so even small price increases significantly impact their bottom line and rates.
- A Fall In Revenue In Air Cargo Sector
With costs rising and demand fluctuating, air cargo carriers are bracing for a potential fall in revenue in 2023. Fuel prices have been on the rise, and airlines will likely have to absorb some of these increased costs rather than passing all of it onto customers.
To stay profitable, airlines may need to find ways to cut costs in other areas of their operations or diversify their revenue streams. Some options could include:
- Optimizing flight routes & schedules to maximize cargo capacity
- Investing in more fuel-efficient aircraft
- Offering additional logistics and supply chain services to generate extra income
- Partnering with e-commerce companies to tap into booming online retail sales
- Exploring opportunities in growing markets like cold chain logistics for pharmaceuticals
- Increased Focus On Digitization And Sustainability
In 2023, digitization is a top priority for shipping companies looking to streamline their operations and provide more transparency for customers. Advancements in technology like automation, and AI are enabling new ways to track shipments, handle paperwork, and optimize shipping routes.
For customers, this means gaining unprecedented visibility into where your cargo is at any given point in its journey by land or sea. You’ll have access to detailed shipping data and interactive maps to monitor your shipment’s estimated time of arrival and receive alerts about any delays well in advance.
Customs & Trade Compliance Trends in 2023
- Trade Tensions & Tariffs
Trade tensions between major economies are likely to continue in 2023. Expect ongoing tariff wars and further restrictions on trade with China. There may also be new tariffs on goods from other countries like Vietnam and India. For shippers, this could mean higher costs, supply chain disruptions, and more complex compliance requirements.
- Heightened Screening
With increased global security concerns, customs agencies worldwide are boosting screening of imported goods. Shipments may face longer delays clearing customs as officials scrutinize details more closely. Be prepared for requests for additional documentation on product details, origins, and intended use.
- Green Initiatives
There is growing pressure for the shipping industry to “go green.” Initiatives aimed at reducing environmental impacts, like low-sulfur fuel requirements, emission control areas, and single-use plastics bans will likely expand to more countries and ports. Shippers and carriers will need to adapt operations and invest in sustainable technologies to meet new regulations.
While 2023 may bring economic and geopolitical uncertainties, focusing on compliance, visibility, and sustainability can help shippers navigate challenges. Close collaboration with carriers, customs brokers, and 3PLs will be key to overcoming any supply chain obstacles on the horizon.
Global Distribution Market Trends in 2023
The global logistics and distribution market is evolving rapidly. Several trends are emerging that will significantly impact shipping in 2023 and beyond.
- Increasing Digitization
The shipping industry is going high-tech. Blockchain, AI, autonomous vehicles and other technologies are enabling more efficient operations, transparent tracking, and streamlined processes. Expect more shipping companies to adopt digital tools in 2023 to improve the customer experience, reduce costs and gain a competitive advantage.
- Eco-Friendly Options
Environmental sustainability is a priority for shippers and customers alike. Alternative fuels like biofuels, electric vehicles and hydrogen power are gaining more mainstream use, especially for last-mile delivery in urban areas. Reusable packaging and waste reduction programs will also expand. Using eco-friendly shipping options is a win-win, benefiting both the environment and a company’s bottom line.
- Growing Significance of Speedy Shipping
A study reveals that almost half of online consumers abandon their shopping carts due to perceived excessive shipping times. Consequently, e-commerce businesses now view rapid delivery as an essential driver for expansion. This mindset is evident as 99% of retailers aim to provide same-day delivery by 2025. While achieving this goal remains uncertain, it underscores the ongoing emphasis on supply chain efficiency. Key aspects contributing to this objective include enhanced visibility, efficient last-mile delivery, and versatile transportation methods.
Supply Chain Solutions from China Global Freight
China Global Freight offers reliable end-to-end shipping solutions for all your needs. From pickup at any location in mainland China to delivery anywhere in the world, we’ve got you covered. Our experienced team handles the entire shipping process so you can focus on your business.
- Door-to-door delivery. We pick up your goods from any suppliers in China and deliver them directly to the final destination. No need to handle the transfer between air, ocean, and land transport yourself.
- Customs clearance. Our experts efficiently clear your cargo through Chinese and destination customs. We ensure all regulations and documentation requirements are met to avoid delays.
- Packing and crating. We properly pack and crate your goods to protect them from any potential damage during transit. Fragile items are expertly packed to prevent breakage.
- Free Warehousing. Up to 40 days of free use of China Warehouses to store, repackage and consolidate your goods before shipping them from China.
- Competitive rates. As one of the leading freight forwarders in China, we leverage our partnerships and buying power to offer you the best possible rates on air and ocean shipping from China.
With China Global Freight, you have a trustworthy partner for shipping all types of cargo from China to the US, UK, France, Germany, Spain and other Europe countries. We can handle everything for you, from picking up from your suppliers, to free warehousing in China, to repackaging & labeling, Amazon FBA prep, to shipping, to doorstep delivery. Let our experts handle the details so you can focus on growing your business.
