That’s a wrap for the month of June. We’re officially in summer and it’s looking pretty different from what we know. Hope you’re staying cool, while safe.
In this month’s issue, we’ll update you on the latest freight market news, tell you about the top five importing mistakes to avoid, and highlight what Freightos.com importers have been up to.
This month, the pandemic continued to have far-reaching impacts on logistics.
Since the start of the pandemic, ocean carriers have cancelled a record number of sailings to match capacity with slumping volumes caused by shutdowns and to keep rates from collapsing.
But as demand for imports from China unexpectedly somewhat rebounded at the beginning of the month, the bump in volumes combined with the already very tight capacity sent rates spiking.
China to US West Coast rates surged 60% since the end of May and passed the peak prices seen during the lead-up to the trade war at the end of 2018.
But ocean carriers have restored some sailings and cancelled significantly fewer ships in July and August, signaling that carriers are more optimistic than some projections, and think that there will be some sort of peak season this year.
Meanwhile, air cargo rates, though still higher than normal for the season, have finally started to come down. Prices nearly quadrupled from January to their peak in April, but have dropped 60% since then, as peak demand for PPE has eased.
What You Need to Know About Freight:
Top Five Mistakes in Small Business Importing
Freight can be complicated. With so many moving parts, mistakes can happen – but we’re here to help you avoid the most common ones:
1. Not booking with enough lead time
Freight shipping has many steps, which means importers need to plan for longer transit time, and account for delays. Make sure to allow 8-10 days to ship by air and 30-40 days by sea – and budget in this time from the outset.
2. Letting your supplier ship your goods
Your supplier may offer to take care of shipping for you, which could save time and hassle, but your supplier probably can’t get you as good a deal as a logistics provider. With more experience and more volume, a logistics provider usually offers better pricing and cost transparency.
3. Not understanding the full costs
New importers often feel blindsided by the full cost of shipping. Make sure to plan for the costs of packaging, customs, special trucking needs, and delivery equipment – that way, you won’t be caught off guard.
4. Not packaging your shipment correctly
Internationally shipped goods go from factory to port to vessel to truck to warehouse, so secure packaging means less damage. Plan optimal packaging with your supplier and request photos of your packaged goods to make sure they are secure.
5. Not playing it safe with insurance
Unfortunately, cargo theft, damage, and loss happen, and the basic insurance provided by carriers usually won’t cover your goods. Spend a little more on insurance upfront and get the peace of mind of knowing you won’t lose thousands of dollars, should disaster strike.
Snapshot from Freightos.com:
Over the last few months, we’ve seen that despite the pandemic and price fluctuations for both air and ocean freight, Freightos.com importers have been continuing to actively compare freight rates and book shipments. In fact, there’s been a more than 30% increase in shipments booked from June 2019 to June 2020.
But what really stands out this month is the resiliency of small and medium-sized businesses. We’re witnessing more and more companies pivot to e-commerce to match the fast-changing business landscape and demand.
And it’s not just that. We’re seeing that many Freightos.com importers are diversifying their supply, especially from origins other than China. Since Q2 2019, there’s been a more than 15% growth of importers searching for freight rates from Southeast Asian countries other than China.
If you’re considering making a shift to e-commerce, check out some of our freight resources to get you up to speed.
Last week we kicked off the first episode of our new fireside chat series — From Here to There: Importers Talking About Real Solutions. If you weren’t able to join the conversation, don’t worry, you can watch the recording here. Stay tuned for episode 2.
As things continue to move quickly, so will we.
Until next time, stay safe and healthy.
– Nomi Kolios, Freightos.com
Freightos® makes global trade frictionless with the world’s online
marketplace for the trillion dollar international shipping industry.
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