Freightos Case Studies Navigating the Post-Pandemic Freight and Shipping Landscape: A Case Study

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	Navigating the Post-Pandemic Freight and Shipping Landscape: A Case Study Freightos

Navigating the Post-Pandemic Freight and Shipping Landscape: A Case Study

Freightos

Technology Category	Sensors - Air Pollution Sensors Sensors - Environmental Sensors
Applicable Industries	Marine & Shipping Transportation
Applicable Functions	Logistics & Transportation Procurement
Use Cases	Demand Planning & Forecasting Time Sensitive Networking
Challenge	The global logistics industry has faced significant disruption since the onset of the COVID-19 pandemic, with inflationary pressures, trade pattern shifts, and elevated logistics costs. Ocean freight prices, particularly China-West Coast US rates, have seen a downward trend, reaching pre-pandemic levels. The volumes of imported containers to the US saw a decline through November 2022, and congestion at key ports like LA/Long Beach significantly eased. However, the rates for shipping a 40-ft container from Asia to the US West Coast have dropped by over 80% since the end of April 2022, and prices to the East Coast have fallen by almost two-thirds. This decline in logistics costs is primarily due to a reduction in consumer spending, which has impacted sales among many importers over the last two years. Furthermore, labor disputes and contract negotiations among port worker unions have added to the complexities of the situation. Read More
About Customer	The customers in this case study are primarily importers and exporters who rely on global logistics for their business operations. These customers have been significantly impacted by the disruptions caused by the COVID-19 pandemic, including inflationary pressures, trade pattern shifts, and elevated logistics costs. They have had to navigate a volatile market, with ocean freight prices and volumes of imported containers to the US seeing significant fluctuations. Furthermore, they have had to deal with the impacts of labor disputes and contract negotiations among port worker unions. Despite these challenges, these customers continue to seek solutions to ensure the efficiency and effectiveness of their operations. Read More
Solution	To navigate the current freight market, importers and exporters are advised to compare quotes and modes to ensure cost efficiency and service effectiveness. They are also encouraged to buffer their freight budget and transit time for changes, explore warehousing options to mitigate the effects of lowered demand and business restrictions in the US, and pay attention to the profitability of their goods. Freight forwarders are advised to communicate regularly with their clients, book orders as soon as possible, and ensure they have the manpower to accept goods upon arrival. In the air cargo sector, optimism exists within the industry, as upcoming electronics product launches are expected to drive a potential peak season rebound in the coming months. Meanwhile, ocean rates from Asia are expected to continue their upward trajectory, rebounding from October lows as carriers adjust capacity to align with reduced volumes in Q4. Read More Log in to view content
Contents

Technology Category

Sensors - Air Pollution Sensors

Sensors - Environmental Sensors

Applicable Industries

Marine & Shipping

Transportation

Applicable Functions

Logistics & Transportation

Procurement

Use Cases

Demand Planning & Forecasting

Time Sensitive Networking

Challenge

The global logistics industry has faced significant disruption since the onset of the COVID-19 pandemic, with inflationary pressures, trade pattern shifts, and elevated logistics costs. Ocean freight prices, particularly China-West Coast US rates, have seen a downward trend, reaching pre-pandemic levels. The volumes of imported containers to the US saw a decline through November 2022, and congestion at key ports like LA/Long Beach significantly eased. However, the rates for shipping a 40-ft container from Asia to the US West Coast have dropped by over 80% since the end of April 2022, and prices to the East Coast have fallen by almost two-thirds. This decline in logistics costs is primarily due to a reduction in consumer spending, which has impacted sales among many importers over the last two years. Furthermore, labor disputes and contract negotiations among port worker unions have added to the complexities of the situation.

About Customer

The customers in this case study are primarily importers and exporters who rely on global logistics for their business operations. These customers have been significantly impacted by the disruptions caused by the COVID-19 pandemic, including inflationary pressures, trade pattern shifts, and elevated logistics costs. They have had to navigate a volatile market, with ocean freight prices and volumes of imported containers to the US seeing significant fluctuations. Furthermore, they have had to deal with the impacts of labor disputes and contract negotiations among port worker unions. Despite these challenges, these customers continue to seek solutions to ensure the efficiency and effectiveness of their operations.

Solution

To navigate the current freight market, importers and exporters are advised to compare quotes and modes to ensure cost efficiency and service effectiveness. They are also encouraged to buffer their freight budget and transit time for changes, explore warehousing options to mitigate the effects of lowered demand and business restrictions in the US, and pay attention to the profitability of their goods. Freight forwarders are advised to communicate regularly with their clients, book orders as soon as possible, and ensure they have the manpower to accept goods upon arrival. In the air cargo sector, optimism exists within the industry, as upcoming electronics product launches are expected to drive a potential peak season rebound in the coming months. Meanwhile, ocean rates from Asia are expected to continue their upward trajectory, rebounding from October lows as carriers adjust capacity to align with reduced volumes in Q4.

Impact #1	Despite the significant challenges faced by the global logistics industry, there have been notable operational results. The easing of congestion at key ports like LA/Long Beach has allowed for a return to normal levels in late November. The resolution of labor disputes and the ratification of new contracts among port worker unions have also helped to stabilize the situation. In the air cargo sector, the industry is optimistic about a potential peak season rebound in the coming months, driven by upcoming electronics product launches. Meanwhile, ocean rates from Asia are expected to continue their upward trajectory, rebounding from October lows as carriers adjust capacity to align with reduced volumes in Q4. These operational results highlight the industry's resilience and adaptability in the face of significant disruption.

Impact #1

Despite the significant challenges faced by the global logistics industry, there have been notable operational results. The easing of congestion at key ports like LA/Long Beach has allowed for a return to normal levels in late November. The resolution of labor disputes and the ratification of new contracts among port worker unions have also helped to stabilize the situation. In the air cargo sector, the industry is optimistic about a potential peak season rebound in the coming months, driven by upcoming electronics product launches. Meanwhile, ocean rates from Asia are expected to continue their upward trajectory, rebounding from October lows as carriers adjust capacity to align with reduced volumes in Q4. These operational results highlight the industry's resilience and adaptability in the face of significant disruption.

Benefit #1	Ocean freight prices, particularly China-West Coast US rates, have seen a downward trend, reaching pre-pandemic levels.
Benefit #2	The rates for shipping a 40-ft container from Asia to the US West Coast have dropped by over 80% since the end of April 2022.
Benefit #3	Prices to the East Coast have fallen by almost two-thirds.

Benefit #1

Ocean freight prices, particularly China-West Coast US rates, have seen a downward trend, reaching pre-pandemic levels.

Benefit #2

The rates for shipping a 40-ft container from Asia to the US West Coast have dropped by over 80% since the end of April 2022.

Benefit #3

Prices to the East Coast have fallen by almost two-thirds.

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Overview

Navigating the Post-Pandemic Freight and Shipping Landscape: A Case Study

Operational Impact

Quantitative Benefit