In ocean freight transport, where time is generally not of the essence because delivery windows are usually measured in weeks, is it important for a shipper or beneficial cargo owner (BCO) to receive an immediate response from their freight forwarder to a rate request?
Historically, the answer has been no. But in a world where automated processes are compressing every timetable in sight, some argue that there's no reason shippers or BCOs need to wait days to obtain spot market quotes from their forwarders. The average wait time to receive a spot quote in 2016 was 101 hours, according to Freightos, a Hong Kong-based online rate quote pOréal that called around to 20 forwarders last year posing as a large U.S. importer seeking quotes on a less-than-containerload (LCL) shipment moving door-to-door from an unspecified city in China to Chicago. That was 11 hours longer than in 2015 when a similar "mystery shopping" test was conducted, Freightos said.
The survey also found that it took, on average, 15 hours for forwarders to follow up in person on a quote request, more than double the time reported in 2015. Nine of the 20 forwarders provided a quote, while three couldn't even receive a quote request because they lacked the necessary online forms, Freightos said. Only five of the 20 have automated e-mail confirmation processes embedded in their systems, the survey found.
"For most forwarders, automation and online sales are not yet a reality," according to the company. Swiss forwarding giant Kuehne + Nagel took top honors in the Freightos survey as being the only forwarder that instantly provided a quote, even though the forwarder didn't follow up with the customer on the quote provided. Kuehne + Nagel was unavailable to comment.
When it comes to industry conversions to digitization, the ocean shipping sector may be the last piece of fruit plucked from the proverbial tree. Tracking containers, and the freight inside them, has never been considered a high priority, mainly due to nonurgent transit times and the relatively low value of seagoing cargo. Still, visibility is important to BCOs who need to configure their supply chains, and even here the industry is found wanting. At a maritime industry conference late last month, Bradley S. Jacobs, founder, chairman, and CEO of transport and logistics company XPO Logistics, Inc., took the industry to task for failing at its baseline task of providing shipment status information to its customers.
According to Freightos, companies like Seattle-based e-tailing and logistics giant Amazon.com, Inc., and Chinese counterpart Alibaba, for whom split-second communications are a way of life, are steadily moving into ocean transport and logistics. Then there are the start-ups and deep-pocketed high-tech companies looking to penetrate traditional industries like ocean shipping, as well as mid-sized ocean forwarders looking to break from the pack. As more of the industry's processes become commoditized, they will move online, giving the advantage to IT-savvy enterprises with a different view on customer service, according to Freightos.
What's more, ocean carriers today directly control about 60 percent of the freight they transport, posing another threat to the large, multinational forwarders, Freightos said.
Inna Kuznetsova, president and COO of Inttra, multicarrier web pOréal that tracks the status of ocean containers worldwide, said the core forwarding model of delivering a broad range of supply chain services is unlikely to change. She added, however, that "what we see in low-rate environments and emerging rates visibility is a higher value assigned to services as opposed to rates, a shift in selection criteria, as well as a more thoughtful approach to services by forwarders, including better use of data and technology."
In a recent e-mail, Kuznetsova took issue with Freightos' assertions that large forwarders have been slow on the IT uptake, noting that they've used technology for years to improve their services. "We may see more 'digital forwarders' leveraging IT to consolidate volume in order to negotiate rates without providing full door-to-door service," she said. "But this type of service has limited applicability especially in (an) era of e-commerce growth, and increased reliance on consolidation, shipping small batches, integration of warehousing, and last mile solutions."
Joshua Brogan, vice president, analytics for consultancy A.T. Kearney, Inc., said the need for instant quotes is less relevant in a sector where the prices on most shipping lanes are set for years. Brogan added, though, that fast quote turnarounds have more impact in a trade lane like the U.S. export market to China, where commodities like wastepaper, cotton, and scrap metal that make up most containerized traffic don't have a buyer until shortly before the ship sails. Those types of shippers, Brogan said, "deal in large volumes and generally function as market makers, quickly capitalizing on arbitrage opportunities; they want to lock in the buy, sell, and transport transactions as quickly as possible." For them, "carving a few days out of the rate quotation process is extremely advantageous" to their operations, he said.
States across the Southeast woke up today to find that the immediate weather impacts from Hurricane Helene are done, but the impacts to people, businesses, and the supply chain continue to be a major headache, according to Everstream Analytics.
The primary problem is the collection of massive power outages caused by the storm’s punishing winds and rainfall, now affecting some 2 million customers across the Southeast region of the U.S.
One organization working to rush help to affected regions since the storm hit Florida’s western coast on Thursday night is the American Logistics Aid Network (ALAN). As it does after most serious storms, the group continues to marshal donated resources from supply chain service providers in order to store, stage, and deliver help where it’s needed.
Support for recovery efforts is coming from a massive injection of federal aid, since the White House declared states of emergency last week for Alabama, Florida, Georgia, North Carolina, and South Carolina. Affected states are also supporting the rush of materials to needed zones by suspending transportation requirement such as certain licensing agreements, fuel taxes, weight restrictions, and hours of service caps, ALAN said.
E-commerce activity remains robust, but a growing number of consumers are reintegrating physical stores into their shopping journeys in 2024, emphasizing the need for retailers to focus on omnichannel business strategies. That’s according to an e-commerce study from Ryder System, Inc., released this week.
Ryder surveyed more than 1,300 consumers for its 2024 E-Commerce Consumer Study and found that 61% of consumers shop in-store “because they enjoy the experience,” a 21% increase compared to results from Ryder’s 2023 survey on the same subject. The current survey also found that 35% shop in-store because they don’t want to wait for online orders in the mail (up 4% from last year), and 15% say they shop in-store to avoid package theft (up 8% from last year).
“Retail and e-commerce continue to evolve,” Jeff Wolpov, Ryder’s senior vice president of e-commerce, said in a statement announcing the survey’s findings. “The emergence of e-commerce and growth of omnichannel fulfillment, particularly over the past four years, has altered consumer expectations and behavior dramatically and will continue to do so as time and technology allow.
“This latest study demonstrates that, while consumers maintain a robust
appetite for e-commerce, they are simultaneously embracing in-person shopping, presenting an impetus for merchants to refine their omnichannel strategies.”
Other findings include:
• Apparel and cosmetics shoppers show growing attraction to buying in-store. When purchasing apparel and cosmetics, shoppers are more inclined to make purchases in a physical location than they were last year, according to Ryder. Forty-one percent of shoppers who buy cosmetics said they prefer to do so either in a brand’s physical retail location or a department/convenience store (+9%). As for apparel shoppers, 54% said they prefer to buy clothing in those same brick-and-mortar locations (+9%).
• More customers prefer returning online purchases in physical stores. Fifty-five percent of shoppers (+15%) now say they would rather return online purchases in-store–the first time since early 2020 the preference to Buy Online Return In-Store (BORIS) has outweighed returning via mail, according to the survey. Forty percent of shoppers said they often make additional purchases when picking up or returning online purchases in-store (+2%).
• Consumers are extremely reliant on mobile devices when shopping in-store. This year’s survey reveals that 77% of consumers search for items on their mobile devices while in a store, Ryder said. Sixty-nine percent said they compare prices with items in nearby stores, 58% check availability at other stores, 31% want to learn more about a product, and 17% want to see other items frequently purchased with a product they’re considering.
Ryder said the findings also underscore the importance of investing in technology solutions that allow companies to provide customers with flexible purchasing options.
“Omnichannel strength is not a fad; it is a strategic necessity for e-commerce and retail businesses to stay competitive and achieve sustainable success in 2024 and beyond,” Wolpov also said. “The findings from this year’s study underscore what we know our customers are experiencing, which is the positive impact of integrating supply chain technology solutions across their sales channels, enabling them to provide their customers with flexible, convenient options to personalize their experience and heighten customer satisfaction.”
Transportation industry veteran Anne Reinke will become president & CEO of trade group the Intermodal Association of North America (IANA) at the end of the year, stepping into the position from her previous post leading third party logistics (3PL) trade group the Transportation Intermediaries Association (TIA), both organizations said today.
Meanwhile, TIA today announced that insider Christopher Burroughs would fill Reinke’s shoes as president & CEO. Burroughs has been with TIA for 13 years, most recently as its vice president of Government Affairs for the past six years, during which time he oversaw all legislative and regulatory efforts before Congress and the federal agencies.
Before her four years leading TIA, Reinke spent two years as Deputy Assistant Secretary with the U.S. Department of Transportation and 16 years with CSX Corporation.
As the hours tick down toward a “seemingly imminent” strike by East Coast and Gulf Coast dockworkers, experts are warning that the impacts of that move would mushroom well-beyond the actual strike locations, causing prevalent shipping delays, container ship congestion, port congestion on West coast ports, and stranded freight.
However, a strike now seems “nearly unavoidable,” as no bargaining sessions are scheduled prior to the September 30 contract expiration between the International Longshoremen’s Association (ILA) and the U.S. Maritime Alliance (USMX) in their negotiations over wages and automation, according to the transportation law firm Scopelitis, Garvin, Light, Hanson & Feary.
The facilities affected would include some 45,000 port workers at 36 locations, including high-volume U.S. ports from Boston, New York / New Jersey, and Norfolk, to Savannah and Charleston, and down to New Orleans and Houston. With such widespread geography, a strike would likely lead to congestion from diverted traffic, as well as knock-on effects include the potential risk of increased freight rates and costly charges such as demurrage, detention, per diem, and dwell time fees on containers that may be slowed due to the congestion, according to an analysis by another transportation and logistics sector law firm, Benesch.
The weight of those combined blows means that many companies are already planning ways to minimize damage and recover quickly from the event. According to Scopelitis’ advice, mitigation measures could include: preparing for congestion on West coast ports, taking advantage of intermodal ground transportation where possible, looking for alternatives including air transport when necessary for urgent delivery, delaying shipping from East and Gulf coast ports until after the strike, and budgeting for increased freight and container fees.
Additional advice on softening the blow of a potential coastwide strike came from John Donigian, senior director of supply chain strategy at Moody’s. In a statement, he named six supply chain strategies for companies to consider: expedite certain shipments, reallocate existing inventory strategically, lock in alternative capacity with trucking and rail providers , communicate transparently with stakeholders to set realistic expectations for delivery timelines, shift sourcing to regional suppliers if possible, and utilize drop shipping to maintain sales.
National nonprofit Wreaths Across America (WAA) kicked off its 2024 season this week with a call for volunteers. The group, which honors U.S. military veterans through a range of civic outreach programs, is seeking trucking companies and professional drivers to help deliver wreaths to cemeteries across the country for its annual wreath-laying ceremony, December 14.
“Wreaths Across America relies on the transportation industry to move the mission. The Honor Fleet, composed of dedicated carriers, professional drivers, and other transportation partners, guarantees the delivery of millions of sponsored veterans’ wreaths to their destination each year,” Courtney George, WAA’s director of trucking and industry relations, said in a statement Tuesday. “Transportation partners benefit from driver retention and recruitment, employee engagement, positive brand exposure, and the opportunity to give back to their community’s veterans and military families.”
WAA delivers wreaths to more than 4,500 locations nationwide, and as of this week had added more than 20 loads to be delivered this season. The wreaths are donated by sponsors from across the country, delivered by truckers, and laid at the graves of veterans by WAA volunteers.
Wreaths Across America
Transportation companies interested in joining the Honor Fleet can visit the WAA website to find an open lane or contact the WAA transportation team at trucking@wreathsacrossamerica.org for more information.