Facing rising geopolitical tensions, ongoing labor issues, and volatile post-pandemic freight markets, logistics professionals are increasingly turning to innovative software solutions to improve freight visibility throughout their operations. Shippers can improve responsiveness, visibility, and operational efficiency to help navigate challenging shipping environments by integrating freight visibility into pre-existing tech stacks.
But before shippers invest in improved freight visibility, it’s vital to understand the precise nature of the biggest problems facing the global logistics industry. With logistics professionals in mind, we’ve delved into three of the most pressing issues troubling today’s shippers and how improved freight visibility can help shippers ensure smooth sailing on the troubled waters of today’s logistics.
Persistent Port Labor Issues
For much of the past year, strikes at U.K. ports have left trans-Atlantic shippers on shaky ground. Port strikes, centered first at Felixstowe and then spreading quickly to trans-Atlantic trade hub Liverpool, have increased capacity issues at European ports already rattled by pandemic-era supply chain chaos.
At both ports, which handle a collective $7 Billion in trade annually, workers have been striking in protest of wage stagnation in the face of historic inflation. As Sharon Graham, General Secretary for U.K. labor union Unite, said in an interview with The Maritime Executive, “Our members are standing firm, and have their union’s complete support. The company must put forward a pay rise they can accept or this strike continues.”
While lengthy arbitration resloved the disputes at Liverpool and Felixstowe in early November, some shippers have turned their attention to ports across the Atlantic.
On the West Coast of the United States, talks between labor unions and employers have been ongoing for months. The negotiations, which have focused on everything from pay to the implementation of automated cargo handling, have extended past the end of the worker’s contract, which expired on July 1, 2022.
Although some logistics experts have said that a full-blown strike is unlikely, others point to the 1971 strike by members of the International Longshoremen and Warehouse Union, which shut down ports across the West Coast. A similar strike today could cost billions and put a wrenching halt to port operations along the West Coast, which sees 37% of total U.S. imports and accounts for 8.7% of the nation’s GDP.
Portside Labor Issues Require Streamlined Communication & Freight Visibility
Increasingly, shippers are turning to ocean freight visibility to cope with the ongoing potential for sudden strikes. While ocean freight visibility provides a broad range of freight visibility assets, an often overlooked key benefit is improved communication throughout a shipper’s supply chain. Automated exception alerts, accessible across all platforms through an application programming interface (API) ensure that each logistics professional throughout a shipper’s supply chain stays up-to-date on the latest portside issues while maintaining real-time freight visibility.
Unpredictable Global Conflicts
Much of the effect of the War in Ukraine has been on vital Black Sea shipping routes, as well as important overland infrastructure and airfreight traffic. According to The Wall Street Journal, the cumulative cost of the conflict in Ukraine could be as much as $2.8 trillion. With the conflict in Ukraine showing no signs of abating, shippers around the globe are struggling to adapt to a new reality for central European shippers
Yet even as shippers reel from the war in Ukraine, many are turning their attention to another potential geopolitical conflict.
In recent years, large-scale protests in Taiwan have brought the issue of Taiwanese Independence to the forefront of geopolitics. As China continues to build infrastructure throughout the South China Sea, a nervous U.S., mindful of its allegiances in Southeast Asia, is keeping a careful eye on China’s behavior toward Taiwan. Recent flyovers by the Chinese military and frequent exercises by the U.S. Navy have served to heighten tensions in recent months.
While the conflict in the South China Sea isn’t inevitable, experts warn that shippers should consider the effect of such tensions on the global supply chain. Each year, $3.37 trillion in trade transits the South China Sea. With this much trade volume at stake, logistics experts warn of potentially catastrophic consequences for the global transportation industry. As industry expert John Paul Hampstead, writing in FreightWaves, reports “The uncertainty and chaos of this changing trans-Pacific paradigm [...] will drive unpredictable and disruptive shipper behavior similar to that seen in 2018, 2020, and 2021.” Despite a recent meeting between President Biden and Chinese Leader Xi Jinping, tensions between the two nations remain at an all-time high.
Facing Volatile Conditions, Shippers Need Freight Visibility
Facing an ongoing war in Ukraine and the specter of trillion-dollar trade disruptions in the South China Sea, shippers are searching for solutions. While shippers can’t predict the direction of global conflict, they can improve operations so that if and when conflict occurs, they have the reactivity they need. For many shippers, improving reactivity requires an investment in ocean freight visibility. Real-time ocean freight visibility, accessed through a fully-integrated API, enables shippers to closely track and trace freight assets, meaning that if and when conflict occurs, shippers have instant access to a complete understanding of their container operations.
Freight Demand Freefall
In a stark shift from the capacity crunch seen throughout the logistics industry since the COVID-19 pandemic, shippers are struggling with low volumes. As FreightWaves reports, “Container import bookings [...] are now only roughly 6% higher than they were in November 2019 after averaging 80% above pre-pandemic levels through most of 2021.”
While reduced demand may seem to come as a relief for congestion-weary shippers, many are seeing the slump as a sign of things to come: “The transportation sector has been on the front end of both the economic boom and its recent decline,” writes Zach Strickland, FreightWaves’ Market Expert and Analyst, in a Nov. 019, 2022 article, “The reason for this is that transportation is the backbone of the goods economy. All goods, unfinished and finished, need to be moved at some point.”
Freight Visibility API Streamlines Analytics for Volatile Markets
Faced with dropping container volume, shippers are increasingly struggling to maintain profitability throughout their operations. Using an API, offered by an ocean freight visibility provider, shippers can access the real-time analytics they need to know how to make the most out of their allocation strategies. As volumes continue to fall amid a disappointing peak season, savvy shippers are turning to improved ocean freight visibility.
For Smooth Sailing Throughout Operations, Choose Freight Visibility With OpenTrack
In 2021, the global logistics market size reached $4.21 trillion and is set to increase to $6.55 trillion by 2027. However, shippers eager to capitalize on a booming logistics market first need to face the challenges of today. To do so, they need cloud-based communication, real-time container tracking, and the constant awareness that comes with automated exception alerts. With ocean freight visibility through OpenTrack, today’s shippers can access a full suite of freight visibility assets, easily integrated into existing tech stacks through API.
- Real-Time Intermodal Freight Visibility to ensure that visibility is maintained whether at sea, at a port, or on the rails.
- Customizable Exceptions Alerts help shippers build proactive rather than reactive operations.
- Streamlined API & TMS Integration means that shippers gain access to the limitless potential of ocean freight visibility without overhauling their existing tech stack.
Book a demo with OpenTrack today, and see how real-time ocean freight visibility can help your business navigate the troubled waters of global logistics.