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The increase in costs at this time of year is a recurring phenomenon that affects both sea, air and land transport.
Maritime transport is the most economical, as it allows large amounts of cargo to be moved from one country to another.
But this, in turn, has the opposite effect at certain times of the year, when there is greater demand for goods. Right now, thousands of companies around the world are looking for a way to move more goods.
And this in turn creates a problem for international logistics operators, who see the demand for ships and containers increasing significantly, which reduces their availability and, therefore, makes freight more expensive.
The use of FCL containers or “full load container” can be a solution to the problems of importers or exporters during these peak seasons.
The “high seasons”, the biggest headache for importers
All markets go through times when sales increase considerably. In the world of international logistics these times are called “peak seasons”.
Normally, the movement of goods begins to grow at the end of July, reaching its maximum expression between October and November.
During this period the costs of air and land transport increase considerably. And although sea transport remains the cheapest, freight and related service costs also increase.
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 peak in demand between July and November, but the main ones are “Black Friday” and the arrival of the Western Christmas or Easter and Chinese New Year sales seasons.
International logistics situation for the 2022 high season
During 2021, international trade experienced a true nightmare due to the interruption of operations at ports in cities where confinement measures were ordered.
The problem of container shortages has also worsened, with large quantities stuck at import ports in the United States and Europe, but scarce at export ports in China, Japan and South Korea.
In 2022, several of these problems persist, although to a lesser extent due to the reopening of large ports and the easing of health restrictions in many countries.
War in Ukraine and increase in gas and oil
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 an obvious effect around the world, causing inflation in markets and an increase in the cost of services at ports.
In turn, problems in the trade of raw materials led to 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 continue beyond 2023.
On the other hand, last year many companies and governments took advantage of the moment to modernize their cargo handling technologies and processes, taking note of the problems that arose during the pandemic.
All of this highlights the need for companies to look for formulas to minimize the risks that they will encounter 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 generated by the season. high in its international logistics. Let’s look at some:
1) Contracting of containers in the FCL modality
Developing a logistics project based on the FCL cargo modality helps to guarantee in advance the necessary space to group and take your products from one port to another.
Although FCL shipping prices can vary greatly at this time of year, you will be able to move your goods quickly and without interruptions. This is essential if the ship has to pass through third countries.
Furthermore, the fact that FCL containers leave sealed and are not opened until they reach their destination gives you an additional guarantee of safety during busy times at ports.
Likewise, when planning peak season departures, it is worth taking the following into consideration:
- It is important to book FCL cargo at least 4 weeks in advance, as well as plan in advance to book ground transportation.
- In high season, loading and unloading times increase due to port congestion.
- Very large (45 ft HC) or small (20 ft or less) containers may be subject to “rollover” in the event of an “overbooking” on the designated vessel. In this case, they will have to wait for another ship, which creates delays and problems throughout the logistics chain.
2) Product storage
Another option to reduce costs in peak seasons is to organize the purchase and storage of products in advance which you will then transport in low FCL load mode.
For example, you can store large volumes from previous months in a warehouse. During this period you must prepare the means of transport that you will use when the high season arrives.
Also consider that in peak seasons it may be difficult to obtain storage for your FCL cargo in some ports.
Therefore, it is important to plan the management of fixed or occasional warehouses, depending on the quantity and type of cargo you will move.
3) Cheaper products in previous months
Reducing products throughout the year is another strategy that helps minimize the impact of transport prices during the high season.
To do this, you can offer promotions and sales throughout the year, so that customer orders are distributed evenly. This way you won’t have a concentration of orders during the high season at the end of the year.
Another option is to set sales quotas during peak season or set delivery deadlines after peak season. This way you will avoid moving your merchandise during the most expensive times.
4) Consider alternative routes for your FCL cargo
Considering the saturation of the world’s main ports during high season, you may choose to use alternative routes to transport your FCL cargo.
This may imply choosing ports with less capacity or a little further away from the final destination, but which in return will be less congested.
This is a good option, especially if your fares and costs are low enough to offset any additional travel time.
Generally, on alternative routes and ports you will find a better offer of transport services during high season. There will also be less 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 you cannot wait until the last minute to prepare import or export logistics.
Planning in advance is key and Alfa Trading can offer you its vast experience in international logistics so you can do it successfully.
We have agents in the main ports around the world and 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 best suits you.
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