We all love the Christmas and New Year holiday period in Australia.
Families get together and the weather is great. Australia are thumping New Zealand in the cricket. Tennis gets underway in Melbourne and there’s no traffic on the roads. Life is good. Then we go back to work. For those of us involved in international trade, that normally means a slow down after the traditional pre-Christmas flood of imports. However, wow, in 2020 we’ve already witnessed devasting bushfires in Australia and now the Corona Virus is starting to have an impact on global trade.
Expect the unexpected! Depending on the source, an area almost the size of New Zealand has burned in Australia over summer. And summer is not over! In China, a virus named Corona has found its way out of a Wuhan seafood market and is now the lead news story, every day, in every media outlet around the world. It’s having a devastating impact on lives in China, and it’s now spread to many parts of the world. Governments are taking strict measures to contain the virus . We are now seeing this impact international freight to and from China.
International shipping is hard enough even without these external influences. It might be an everyday task for logistics managers, but that doesn’t mean it’s an easy one! Increasing loads, tight delivery schedules, shipping criticalities, bushfires, drought, the Corona Virus, operational challenges and the jungle of red tape and regulations keep everyone on their toes. At the same time said challenges don’t leave much time to focus on common mistakes or how to fix them.
The risks of not doing so though include potential instability in sea freight operations. It has an impact on transit times, costs, customer satisfaction, and the logistics manager’s job performance.
Read on to learn about five common mistakes often made when managing sea freight – and how you can overcome them and ensure smooth sailing.
#1 Mistake: Booking shipments at the last moment
Unlike air freight, sea freight does not give you the option of daily shipping. The cargo service’s large carrying capacity and controls on port movements impose limits on the frequency of vessels.
Not booking ahead means you could miss the boat due to lack of available space, so it is important to be proactive and schedule shipments in a way that aligns with the delivery deadlines you need to meet. This is more important now than ever before with the instability we’re likely to see on shipping services, particularly to and from China in the coming months.
#2 Mistake: Putting cost savings before timelines
Sea freight is an extremely cost-effective freight option, but it is not the fastest. Opting for the lowest shipping cost can be a false economy, as this may result in a supply chain with multiple trans-shipping points and add additional time to the delivery timelines.
Weigh the cost of not getting your stock on time versus a small saving on freight (or all the other hidden charges). The risk is that stocks may run out and customers may be left unsatisfied. The cost of a lost sale to a major customer v a saving of $50 on international freight for a 40’ container from Shanghai to Sydney. Working with an experienced freight forwarder can solve this. Their knowledge can assist you to decide on the best balance between cost and time. They can also assist with other aspects that can save you time or money – or even both – such as load consolidation, planning and scheduling, up-sizing capacity and reducing any additional charges, like storage charges.
There are many freight forwarding companies in Australia and not everyone may be the right fit for you.
#3 Mistake: Managing everything in-house
In-house management of sea freight services may seem the cheapest option on paper, however, in reality, outsourcing to freight forwarding companies can benefit the bottom line.
Because your cargo must move through multiple transportation modes and jurisdictions, an expert can assist in navigating, managing and negotiating all the complexities. A freight forwarder, repetitively doing this all day long for many customers, must constantly stay up to date on regulations and requirements for the logistics industry – you should use that to your advantage. Having many customers, a freight forwarder can get better prices than a single company would not be able to get. You can switch a freight forwarder at any time or even work with more than one, depending on your requirements.
This liberates your time for meeting other crucial KPI’s and reduces the risk of glitches in your supply chain.
#4 Mistake: Deciding between LCL or FCL
One of the most important decisions for logistics managers is choosing between less than a container load (LCL) and a full container load (FCL), and it’s not always easy to make the right choice. LCL is suitable for low volume shipments, but what if your cargo is close to a full container load of either 20ft or 40ft?
LCL is cost-effective, but it can increase transit time and the multiple handling involved increases the risk of damage to your goods. On the other hand, FCL increases the cost but reduces the transit time and chances of damage.
So, it’s important to prepare a comparison sheet based on transit time, shipping cost and risk, and make the decision that best suits your priorities.
#5 Mistake: Selecting inappropriate shipping services
Sea freight is not just a matter of moving cargo from the port of origin to its destination port. Logistics managers also need to arrange the pickup and delivery of the cargo to the consignee’s gate or other agreed delivery point. This requires the appropriate selection of pickup and delivery transportation.
It is important to analyse the costs, transit time and operational aspects involved such as the availability of docks, loading equipment, clearance services, and other considerations when choosing transport. By having your finger on the pulse in terms of your shipments’ movements and choosing the right services in advance, you can maximise the effectiveness and efficiency of your end-to-end shipping solution.
Set your compass for success
International sea freight shipping to/from Australia can be a complicated process and the challenges can make it hard to eliminate all the potential pitfalls with limited in-house resources. Add the challenge that the Corona Virus is presenting to your supplies chain, and it’s a tough gig! Partnering with a professional sea freight forwarder can be your best option, so you can leverage their experienced teams, global networks, and world-class IT infrastructure and ensure your cargos reach their destination efficiently, cost-effectively and on time.
For more than a century BCR has continued to assist small, medium and large businesses to achieve an optimum logistics solution with transportation as well as air freight and sea freight services to and from the major ports of Australia including Brisbane, Sydney, Melbourne, Adelaide and Fremantle (Perth).