Escalating Shipping Costs Demand New Solutions

13 August 2021 – Neutral consolidators are seeing skyrocketing demand for imports. And with the global increase in cargo volumes, along with port congestion, capacity constraints and unreliable carrier schedules, CFR Freight has been forced to look at alternative routings for LCL cargo, says trade manager Michelle Horner.

“Along with our global partners, we are increasingly looking at non-traditional routings for cargo. Thanks to several offices and fully licensed container freight station facilities across the country – along with our inter-depot trucking services – we have been able to come up with these solutions, allowing us to improve the efficiency of transit times and expedite cargo handling.”

Horner says the industry-wide focus at present is on the conversion of accurate lead times into cargo delivery to clients. “Cargo lead times, vessel transit times, port delays and vessel delays are all focal points in logistics at present. Historically, South African importers had several service options, with competing carriers and fairly stable time frames in which to move their cargo,” says Horner.

“This past year has seen schedule reliability being called into question as carriers and cargo handlers struggle to cope with the high volume of cargo. It is now more evident than ever before that outside-the-box thinking, as well as frequent and honest client communication, are necessary to effectively collaborate as partners to manage market expectations and cargo movement.”

Horner says capacity constraints and costs are particularly challenging for importers. “Vessel capacity into South Africa is severely constrained and importers struggle to obtain booking releases to coincide with cargo readiness dates. The unprecedented freight rates, as well as the introduction of shipping priority, peak season congestion and imbalance surcharges, has seen shipping costs escalate in the past months.”

According to Horner, the mantra of CFR Freight remains to work on a neutral basis with its customers to supply a comprehensive network, with cost-effective and timely solutions, especially in current conditions.

To support customer needs, while also alleviating congestion in transhipment hubs, the company has introduced three new direct LCL services into South Africa in the first half of 2021. Two services out of Australia – Sydney to Durban and Melbourne to Durban – have reduced cargo handling in the traditional LCL transhipment hub of Singapore, while its recently introduced Le Havre to Durban service has been a welcome addition to the bouquet of European direct LCL services into South Africa.

“For us, the growth in imports allows for more opportunities to use new critical mass volumes to trigger new ventures into direct LCL services,” says Horner. Going forward, communication will remain a core focus – providing clients with regular information on the constantly changing market conditions.

“There will be diversification as importers look to source goods and services from non-traditional/alternative suppliers,” says Horner. “The CFR Group sees opportunity for partnership with our clients, while our guaranteed neutrality across the four divisions in the Group – ocean, air, road and warehousing – allows us to continue to develop solutions and provide resources to facilitate the movement of import cargo.” Source (Freight News)