FRETTING OVER FREIGHT 2010
2010 promises to be a challenging year for freight logistics. Steamship lines and air lines have reduced the number of vessels sailing and the number of air freighters flying. The result is a shortage of equipment and space. This means that freight rates (both air and ocean) will be rising this year and that we can expect delays in finding containers and space on both ships and airplanes.
2009 was a very bad year financially for steamship lines and airlines. As a result, they must make profits in 2010. We have already seen their resolve – usually when there is a general rate increase, there will be some companies that do not go along or go along at a reduced level. This year, when rate increases were announced, there were no holdouts. All steamship lines are assessing the same rate increases. We can probably expect more this year.
GDM will do our best to provide you with competitive freight quotes from the forwarders we work with. However, already we are seeing that freight quotes are “for reference only.” When we receive competitive rates, we quickly learn that it could be a month before we could get a container at that rate (and that is still no guarantee). Therefore, we would like to suggest that whenever we provide you with a freight rate, you should add at least 15% to be safe.
Please also note that it can often take us two weeks to find containers to load once we have booked the containers. There is a shortage of containers and space on ships.
To avoid even greater delays, we need to be able to book containers at rates higher than originally quoted and we need your cooperation and understanding to do that.
Please note that there may also be delays at the ports once the containers arrive there. Again, the number of steamships in service has been reduced and there is therefore a shortage of space on those vessels in service. Containers being delayed a week at port will probably be common in 2010.
Therefore, to serve you best in 2010, we need you to:
a. allow us to book containers at rates up to 15% higher than we initially quote to you;
b. allow at least an extra week of transit time from the factory to the port in your country;
c. allow two weeks to find a container once we have your confirmation of the quoted rate.
GDM will try to book containers as early as possible based on the expected delivery date of your order. And again, to do this, we will need your cooperation and understanding that the freight rates we quote will very possibly be at least 15% higher by the time we ship your order.
For those of you who book freight through your own forwarders, your forwarders will probably need the same cooperation and understanding. If your forwarder must constantly get your approval for increased freight rates, your shipments will very possibly be delayed. Containers and space on vessels is in short supply. When a container is available, your forwarder will need to book that container immediately. Please tell your forwarders that you understand the market situation and that they have your approval for increases in freight charges up to 15%.
2010 promises to be challenging in terms of freight logistics. However, with your understanding and cooperation, we should be able to keep your supply lines running smoothly and avoid product shortages at your end.