With 90% of world trade transported by sea, it’s fair to say everyone in shipping will feel the sting of the COVID-19 pandemic, with shippers tremendously affected by the economic slowdown.
However, COVID-19 presents shippers with the opportunity to fundamentally change how they ship to create resilient business models to not only sail through crises but also improve operations during the post-COVID-19 world.
We at BlueX understand the challenges ahead and have been part of the new wave of shipping. We’re here to help you on your journey past COVID-19 to a new digital reality.
Falling manufacturing and consumer demand has slowed down the world economy, with the WTO predicting a loss of 13% to 32% in trade for 2020. Despite this, freight rates have remained higher than expected.
Currently, rates remain above $1,500 per forty-foot equivalent unit (FEU), due to carriers propping up rates with blank sailings. During the 2008 financial crisis, the lowest FEU price was $80.
Despite low demand, the cost of shipping has not dropped. Added to this, containers and equipment are stuck at ports across China, causing a shortage, which may lead to disruptions and backlogs to shippers.
Container and Equipment Shortages
According to a UNCTAD report, after the lockdown in China, there was a rise in missed port calls in China, and container and port traffic went into decline. As a result, shipping capacities were slashed to compensate for the lack of demand for shipping.
After months of quarantine measures, Chinese businesses and factories are slowly reopening. However, the rest of the world is still in lockdown, with lower demand for exports out of China.
Although it’s hard to determine when the rest of the world will come out of their lockdowns, when they do, there should be a huge demand for space. What shippers and BCOs can expect are backlogs.
From air to ocean, space is going to be just as valuable as a good rate.
The imbalance of containers and equipment will create problems for ocean shippers. Already, Europe and North America are suffering from container deficits. It is fair to say that this shortage could lead to shipment delays if you’re unable to secure your space on board carrier vessels.
Post-COVID-19 Boom and Backlogs
It’s difficult to tell when, but like the post-SARS shipping boom in 2004, there is likely to be a boom once COVID-19 restrictions are lifted as the global pandemic begins to wind down. Demand from consumers and output from suppliers will grow, putting a strain on carriers and logistics providers to accommodate shippers.
Many shippers may find their cargo being rolled over with containers and equipment imbalances occurring around the world.
Shippers need to start strategizing for the post-COVID-19 reality, and a key part of that will be getting space guarantees to prevent being rolled over.
That’s something we at BlueX can help with through our partnership with Evergreen Line, along with other benefits, including digitalizing your shipping.
The BlueX Freight Commerce Platform (FCP) is driving the innovation needed to jumpstart shippers during and after COVID-19.
Far from being another link in the supply chain that promises to streamline operations but results in more complexity, the FCP offers a solution to what is ailing shipping — a lack of online automation and digitalization.
Our platform is here to offer a realistic approach to digitalizing your business to overcome COVID-19 and other issues affecting operations in the shipping industry.
1. Get Secured Space During the Post-COVID-19 Boom
With container and equipment shortages, and fewer freight container ships in service during the lead up to the upcoming shipping boom, it’s essential to book shipments with secured space.
Evergreen Line’s online booking platform, GreenX, offers shippers and BCOs secured space on all bookings. Built by BlueX, we understand just how important space is to shippers, and we’re providing you with a solution to the upcoming scramble for space on board container ships.
2. Faster Bookings with Digitalized Contract Rates
BlueX offers the capability to request and review carrier rates through the BlueX Rate Management System (RMS) without any delays caused by manual input.
Instead of waiting for contract rates to update through traditional channels, instantly view rates through our BlueX platform.
The BlueX RMS is currently only open to GreenX users that want to access Evergreen Line contract rates. If you’d like to add your carrier contract rates, please join our Shipper Ambassador Program to request your rates to be on BlueX through EDI or API integrations.
3. Review Accurate and Up-to-date Shipping Information
While gaining access to your contract rates online can save you time, BlueX also ensures that your rates are accurate and up-to-date, as they come directly from your carrier through integrations with our system.
There is no need to wait to receive your most up-to-date rate, or risk quoting a wrong rate.
Our system will only display your most recent contract rate, as we understand just how often these rates can change.
4. Access to Trade Services
An important part of creating an integrated ecosystem to streamline ocean freight is to offer trade services, or third-party logistics, through our Freight Commerce Platform (FCP).
Making a booking is only one part of transporting your freight, and that’s why our FCP is planning to offer customs, insurance, and payment terms services in the future.
Further trade services will be added as we continue to grow our network.
It’s time to get away from the attitude that “the more things change, the more they stay the same,” and start to change our approach to shipping meaningfully.
While COVID-19 may only affect business in 2020 — and perhaps 2021 — crises will inevitably reoccur in shipping.
Joining BlueX can be your pathway to creating a supply chain risk management strategy to create a resilient operation in the future if you don’t already have one.
To get started, Evergreen Line customers can first sign up for GreenX and then join the Rate Management System.
If you are currently not an Evergreen Line customer or a GreenX user, you can join our Shipper Ambassador Program to ask your ocean carrier to digitalize their offerings on the BlueX FCP.
If you have any questions, please feel free to contact us at info@bluextrade.com.