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Anyone who has been tracking international freight rates in recent years will have noticed a volatile picture. Whereas ten years ago a container was still a predictable cost item within a logistics budget, that same container has now become a variable that can fluctuate significantly from month to month. Anyone working in logistics now knows that predictability is no longer the norm, but rather the exception in an otherwise turbulent market.
From ‘just in time’ to ‘just to be on the safe side’
For decades, international logistics revolved around efficiency: as little stock as possible, planning as tight as possible, just-in-time. That model worked perfectly as long as shipping routes remained open, ports did not become congested and geopolitical tensions were confined to the headlines. In recent years, that assumption has been undermined on several fronts. Disruptions along key shipping routes, persistent congestion in Asian ports and fluctuating import duties have forced buyers and supply chain managers to revise their planning models. The result: companies are once again deliberately building in buffers, even if this comes at the cost of profit margins and storage space.
That extra stock isn’t free. Warehouse space has become scarce in large parts of the Netherlands and Flanders, and every pallet that sits around for longer puts pressure on profitability. Nevertheless, more and more procurement departments are consciously opting for that extra margin, simply because a missed delivery to an end customer often works out more expensive than a few weeks’ extra storage costs. It is a trade-off that was barely on the agenda five years ago, and is now a standard part of every procurement meeting.
This shift is not just a matter of holding more stock. It also affects the way in which companies select their carriers and plan their routes. Whereas price used to be the deciding factor, buyers now place greater emphasis on how flexibly a freight forwarder can switch between sea freight, air freight and multimodal transport when a route unexpectedly runs into difficulties. In practice, a provider that competes solely on price often loses out to one that can adapt as soon as circumstances change.
Digitalisation as a response to uncertainty
A second, less visible shift is taking place behind the scenes: the rise of track-and-trace, predictive planning and automated document processing. Whereas a shipper used to be satisfied with an indicative arrival date, it is now expected that a consignment can be tracked at container level, including real-time notifications in the event of delays. For freight forwarders, this means investing in systems that not only collect data but are also immediately usable by customers who want to be able to make adjustments themselves as soon as something deviates from the plan.
That transparency works both ways. Shippers can respond more quickly to delays, but freight forwarders, in turn, can also better explain why a route turns out to be more expensive or, conversely, cheaper than expected. In a market where rates can fluctuate on a weekly basis, this is no longer a luxury, but a prerequisite for retaining customers’ trust in the long term.
Smaller freight forwarders are filling a niche
It is striking that this uncertainty does not only work to the advantage of the large, globally operating logistics service providers. It is precisely the smaller and medium-sized freight forwarders with a personalised approach that are managing to hold their own, simply because they can adapt more quickly when a client suddenly needs to switch from sea freight to air freight, or vice versa. Logitrex Cargo Solutions, based in Borne, specialises in global sea freight and logistics and is a prime example of how a smaller player puts that flexibility into practice: fewer intermediaries between the client and the service provider, enabling a quicker response when a route unexpectedly runs into difficulties or a deadline shifts.
For shippers considering a review of their logistics partners, this is a consideration that goes beyond just the freight rate. In practice, anyone wanting to arrange sea freight from start to finish without any hassle is primarily looking for a partner who thinks proactively as soon as circumstances change the schedule, rather than simply a partner who provides the cheapest quote on paper.
What remains is the reliance on sound agreements
What remains unchanged, despite all the disruption, is the importance of accurate customs documentation and up-to-date knowledge of import regulations. Errors in declarations or outdated tariff codes still lead to delays that are far greater than the problem they stem from. Companies doing business internationally would be well advised to keep abreast of the latest import and export regulations, for example through the information provided by Customs on declaration procedures and tariff classification.
The lesson of recent years is not that international supply chains have become unmanageable. Rather, it is that manageability has taken on a different form: relying less on a single fixed route and a single fixed timeline, and investing more in partners and systems that adapt as soon as reality turns out differently from what was planned. For those working in logistics, this is not a temporary adjustment, but the new way of doing business.
For the sector as a whole, this also means a different way of collaborating between shippers and freight forwarders. Whereas an annual contract used to be mainly about rates, discussions now just as often centre on scenarios: what happens if a route is out of action for three weeks, and who takes the initiative at that point to propose alternatives? Parties who have this discussion in advance are demonstrably better placed when a disruption actually occurs, and waste less time improvising under pressure.