High season is here and transport rates rise around the world. What to do to reduce costs? Using the FCL freight mode could be a solution.
The increase in costs at this time of year is something recurrent that affects both maritime, air and land transport.
Maritime transport is the most economical since it allows the mobilization of large quantities of cargo from one country to another.
But this in turn has an opposite effect in certain seasons of the year when there is a higher demand for goods. At this time, thousands of companies around the world are looking for ways to move a greater number of goods.
And this in turn creates a problem for international logistics operators, who see the demand for ships and containers increase significantly, which reduces their availability and therefore makes their freight more expensive.
The use of containers under FCL modality or “full load container” can be a solution to the problems of importers or exporters in these high seasons.
The “peak seasons”, the biggest headache for importers
All markets have times when sales rise sharply. In the world of international logistics these seasons are called “peak seasons”.
Normally the mobilization of goods begins to grow at the end of July, reaching its maximum expression between October and November.
In this period the costs of air and land transport rise considerably. And although maritime transport is still the cheapest, freight and related service costs also rise.
This situation affects the profitability of international trade operations and can sometimes make some export and import projects unfeasible.
There are several reasons for this spike in demand between July and November, but the main ones are the realization of “Black Friday” and the arrival of the sales seasons of Western Christmas or Easter and Chinese New Year.
Situation of international logistics for the 2022 high season
During the year 2021, international trade experienced a real nightmare due to the interruption of operations in ports of cities where confinement measures were ordered.
Also the problem of container shortages became more acute, dammed up in large quantities in import ports in the United States and Europe but scarce in export ports in China, Japan and South Korea.
In 2022, several of these problems persist, although to a lesser degree due to the reopening of large ports and the easing of health restrictions in many countries.
War in Ukraine and increase in oil and gas
In 2022 the cost of international transport is affected by a new external factor, such as the increase in the price of gas and oil as a result of the sanctions imposed by Europe and the United States against Russia for the campaign launched at the end of February in Ukraine.
These sanctions have had a clear effect throughout the world, provoking inflation in the markets and an increase in the cost of port services.
In turn, the problems for the trading of raw materials have caused an increase in the price of many finished products.
In this regard, the Argentine newspaper Ámbito, specialized in economics, assured that this increase in costs in international logistics could extend beyond 2023.
In contrast, in the last year many companies and governments have taken the time to modernize their cargo handling technologies and processes, taking note of the problems that have arisen during the pandemic.
All this makes evident the need for companies to look for formulas to minimize the risks that they will find in the supply chain during the high season that has just begun.
How to prevent high season from affecting your supply chain?
There are several strategies that can be applied to minimize the problems that the high season generates in your international logistics. Let’s see some:
1) Hire containers under FCL modality
Preparing a logistics project based on the FCL cargo modality helps you secure in advance the necessary space to group and transport your products from one port to another.
Although prices for FCL freight can vary widely at this time of year, you will have the ability to move your cargo quickly and without interruption. This is key if the ship must pass through third countries.
In addition, the fact that the FCL containers leave sealed and will not be opened until they reach their destination gives you an additional guarantee of security in the busiest seasons inports.
Similarly, when planning peak season shipments, keep the following in mind:
- It is important to reserve the FCL cargo at least 4 weeks in advance, as well as to anticipate the reservation of land transport with sufficient time.
- In high season, loading and unloading times increase due to port congestion.
- Very large containers (45 feet HC) or small containers (20 feet or less) may be subject to “roll over” in the event of an “over booking” in the assigned vessel. In this case, they will have to wait for another ship, which causes delays and problems throughout the logistics chain.
2) Product storage
Another option to reduce costs in high seasons is to organize in advance the acquisition and storage of the products that you will later transport in the FCL freight mode.
For example, you can store large volumes in the previous months in a warehouse. During this time you must prepare the means of transport that you will use when the high season arrives.
Also consider that in “peak seasons” it can be difficult to get storage for your FCL cargo in some ports.
Therefore, it is important to foresee the management of fixed or occasional warehouses, depending on the quantity and type of cargo that you will move.
3) Cheaper products in previous months
The lower price of products throughout the year is another strategy that helps minimize the impact of transport prices during the high season.
To this end, you can offer promotions and sales throughout the year, so that customer orders are evenly distributed. This way you will not have a concentration of orders in the high season at the end of the year.
Another option is to put quotas on sales in high season or set delivery times after the season. In this way you will avoid moving your merchandise at the time of highest cost.
3) Consider alternative routes for your FCL cargo
Considering the saturation of the main ports of the world in high season, you can choose to use alternative routes for the transfer of your FCL cargo.
This may involve choosing ports with lower capacity or somewhat further from the final destination, but which in return will be less congested.
This is a good option, especially if your rates and costs are low enough to offset any additional travel time.
In general, on the alternative routes and ports, you will find a better offer of transport services during the peak seasons. There will also be a shorter waiting time at customs.
Prepare your FCL cargo in high season with Alfa Trading
Finally, it only remains to reiterate that the high season greatly affects the maritime transport of goods, so it is not possible to wait until the last minute to prepare import or export logistics.
Planning ahead is the key and Alfa Trading can offer you its extensive experience in international logisticsl so that you can do it successfully.
We have agents in the main ports of the world and we are ready to help you prepare your import and/or export project in Paraguay at all times of the year using FCL cargo or the type that suits you best.
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