How you can steamroll exploding air and ocean freight costs
Are you also affected by the explosion in air and ocean freight costs? In the wake of the pandemic, freight forwarders severely limited their capacities, and in some cases even sold off means of transport. Now they are ramping up again, but capacity remains limited, existing customers are being given preference – for everyone else, there is still downtime and profiteering. What can you do as a willing new customer? Sebastian Krings, partner and logistics expert at Kloepfel Consulting, on price and negotiation levers in the ocean and air freight business.
The situation: Freight forwarders in capacity shortage
On the spot market for container transports, it seems that in recent weeks it is no longer possible to buy freight capacity at a reasonable price or to obtain capacity at all. This applies to both air and ocean freight: there is a shortage of capacity on many routes, especially between Asia and Europe.
How long will this situation last? A slight improvement can be observed at the moment – but that doesn’t matter at all to some companies when, for example, perishable materials urgently need to be loaded, preferably yesterday. Now is the time to act.
But how can freight capacities that are in contention be secured? Freight forwarders prefer to use the available capacities for their existing customers – understandably, because these offer reliabilities of acceptance and thus planning reliability, which is worth its weight in gold in these uncertain times. The solution, therefore, is to “move away from spot requests and toward strategic purchasing!”
Strategic volume purchasing: Unrecognized opportunity
SME buyers often mistakenly assume that their freight volumes are too small anyway and that the spot market is the only solution. Our experience shows that this is often not true: strategic purchasing offers the opportunity to achieve longer-term rate validity, to become an existing customer and to achieve serious process cost savings.
What is lacking, however, is the time and resources to strategically tender freight capacity. In doing so, we bundle volumes for our customers and thus achieve price leverage for them that can compete with large orders. Another advantage is that market volatility, such as sudden peaks, affects our customers in a muted way at best.
Tools and expertise help out of the freight crisis
Our experts also make use of the most advanced professional tools on the market for tenders, including the market-leading sea freight benchmark tool XENETA. This database makes short- and long-term bought and sold rates transparent, which would otherwise not be apparent to our customers. Freight rate trends can also be determined to monitor developments – market volatility is always kept in view.
With the expertise of our 15 logistics specialists, we can not only form reliable theses on future developments, but also renegotiate with the inventory carrier in a strong argumentative manner if there are tendencies towards discounts. Our work is 100% success-based – if our customers do not save, they do not pay.
Do you also want to bring your freight rates from heaven to earth? Then get in touch – we would be happy to arrange a free sample potential analysis!
Pressekontakt
Kloepfel Consulting
Gerrit M. Schneider
Pempelforter Str. 50
40211 Düsseldorf
T: +49 211 / 882 594 17
gm.schneider@kloepfel-group.com
www.kloepfel-group.com