May 28, 2024
Freight forwarding is the beating heart of the global supply chain. It facilitates the movement of goods across the world, and involves many moving parts across the supply chain network: from carriers and hauliers to shipping companies and customs authorities.
But since freight transport is so critical and far-reaching, it is affected by the shocks and pressures of a globalised economy. This can cause challenges in shipping industry processes, and make it harder to maintain the seamless flow of goods via rail, road and sea. Periods of economic uncertainty can also intensify the challenges and problems of the shipping industry.
Here, we’ll analyse the most significant challenges facing shipping industry players—from shippers to freight forwarders—in 2024, and how they can be mitigated.
But since freight transport is so critical and far-reaching, it is affected by the shocks and pressures of a globalised economy. This can cause challenges in shipping industry processes, and make it harder to maintain the seamless flow of goods via rail, road and sea. Periods of economic uncertainty can also intensify the challenges and problems of the shipping industry.
Here, we’ll analyse the most significant challenges facing shipping industry players—from shippers to freight forwarders—in 2024, and how they can be mitigated.
Understanding Freight Challenges
Freight forwarders organise and manage the movement of shipments across road, rail and sea. While they don’t drive any vehicles, they play a vital role for many businesses who get them to facilitate their cargo transportation.
To do so, they leverage a wide network of carrier partners and other freight contacts to ensure the flow of goods run seamlessly between shippers, carriers, and customers.
But, since freight involves these various interconnected parts, it can make the process more complex. Especially since in recent years, supply chains around the globe have been affected by geopolitical tensions. On top of this, the freight industry has faced other challenges that can compound each other.
To do so, they leverage a wide network of carrier partners and other freight contacts to ensure the flow of goods run seamlessly between shippers, carriers, and customers.
But, since freight involves these various interconnected parts, it can make the process more complex. Especially since in recent years, supply chains around the globe have been affected by geopolitical tensions. On top of this, the freight industry has faced other challenges that can compound each other.
Common Challenges Faced by Freight Forwarders and Shippers
We can group the most pressing freight forwarding challenges right now into four key areas:
1. Transportation delays and disruptions
2024 began with major disruptions at two of the world’s most important trade routes: the Suez Canal and Panama Canal, the latter of which is still seeing issues related to the canal itself drying up. Problems in the Red Sea have also held back shipping traffic and forced companies to divert their sea transport, adding days onto delivery times.
The knock-on effect of this is unevenly distributed, as smaller shippers tend to have less inventory than larger companies, and slower deliveries lead to lower customer satisfaction.
The knock-on effect of this is unevenly distributed, as smaller shippers tend to have less inventory than larger companies, and slower deliveries lead to lower customer satisfaction.
2. Capacity constraints and equipment shortages
Securing enough shipping space is usually tough during peak season, but other factors have made it even harder to ensure sufficient capacity. Congestion and disruption across supply chains, from ports to maritime routes and border crossings, can also intensify these capacity issues as more carriers experience delays and can’t get to their next pickup.
3. Regulatory compliance issues
New regulations such as the EU Emissions Trading System, Carbon Border Adjustment Mechanism and other measures present freight shippers and logistics companies with new responsibilities and obligations in 2024. All EU countries signed up to these regulations, including shippers travelling through, risk large fines if they fail to comply.
This means shippers, forwarders and others must pay careful attention to what they need to provide. Otherwise, they can face additional charges, storage fees and experience delays, all of which contribute to greater overhead costs and poorer customer experience.
This means shippers, forwarders and others must pay careful attention to what they need to provide. Otherwise, they can face additional charges, storage fees and experience delays, all of which contribute to greater overhead costs and poorer customer experience.
4. Technology integration
Making transport routes more efficient is hugely beneficial for a business’ bottom lines. One of the key advantages of dedicated lanes is that they help boost the flow of fully loaded trucks, providing consistent access to a network that enables seamless freight transport between hubs, distribution centres and the end customer.
The savings they make from increased efficiency in cargo movement can then be passed on to the consumer and additional profit reinvested into growing the business.
The savings they make from increased efficiency in cargo movement can then be passed on to the consumer and additional profit reinvested into growing the business.
How are freight lanes chosen?
Although there are significant challenges faced by shipping industry decision-makers, new solutions and techniques have been, and are being, developed to ease the logistics process in several key ways:
Collaboration and communication with carriers and suppliers
Supply chain issues are influenced by global trends, but clear communication and effective partnerships can help shippers, carriers and other parties limit risk and maintain smooth operations.
Freight forwarders have to build strong networks, and these can be used for collaborating on coverage and tech adoption across the value chain. This benefits all parties in the logistics process, who can share information and solutions to deliver better experiences for their customers and thrive in a competitive landscape.
Communication and transparency among supply chain agents are also key. Freight forwarders, for example, can use internal scorecards for their carriers and other partners, while making sure all information is up to date and accurate. This can be especially helpful to ensure that other stakeholders across the supply chain stay compliant with new regulations.
Freight forwarders have to build strong networks, and these can be used for collaborating on coverage and tech adoption across the value chain. This benefits all parties in the logistics process, who can share information and solutions to deliver better experiences for their customers and thrive in a competitive landscape.
Communication and transparency among supply chain agents are also key. Freight forwarders, for example, can use internal scorecards for their carriers and other partners, while making sure all information is up to date and accurate. This can be especially helpful to ensure that other stakeholders across the supply chain stay compliant with new regulations.
Adopt new tech solutions
Exciting new technologies are being increasingly adopted in the freight sector which can streamline logistics and boost ROI, such as:
Artificial intelligence
Machine learning is where computer systems can learn and adapt independently of instructions. These can be used to analyse advanced statistical models across the supply chain, for example: predicting inventory levels, stock availability, delivery windows and other vital metrics.
Another less-discussed function is predictive maintenance: this is where ML models analyse whether vehicles or other equipment systems are likely to experience issues ahead of time.
Another less-discussed function is predictive maintenance: this is where ML models analyse whether vehicles or other equipment systems are likely to experience issues ahead of time.
Machine learning
Artificial intelligence (AI) is one of the most talked about technologies right now, and there’s little wonder why. Implementing AI automation in freight can help logistics teams by using relevant data to enhance tracking and visibility, and make shipping windows more precise—all leading to a better customer experience.
Internet of Things (IoT)
IoT objects are networked devices, such as sensors, GPS trackers and cameras, which are used to enhance real-time data accuracy in shipment tracking. Crucially, these devices can streamline paperwork management for smoother customs clearance, provide safety alerts and forecast route changes.
Other IoT applications in freight include smart containers, which can detect the temperature inside freight storage boxes—an important requirement for pharma products, perishable items and food, among others. They can also help improve freight cargo security and theft prevention.
Remember: as advanced technologies are introduced across the supply chain, shippers need to be extra vigilant in ensuring cyber security measures to protect sensitive business data and customer information.
Other IoT applications in freight include smart containers, which can detect the temperature inside freight storage boxes—an important requirement for pharma products, perishable items and food, among others. They can also help improve freight cargo security and theft prevention.
Remember: as advanced technologies are introduced across the supply chain, shippers need to be extra vigilant in ensuring cyber security measures to protect sensitive business data and customer information.
Intermodal and route optimisation
Intermodal transport
Intermodal refers to the use of different modes of transport—i.e. Sea, rail and road trucking—throughout the freight journey. It enables a more flexible and eco-friendly method of freight logistics.
Rail transport, for instance, is more fuel-efficient than road trucking. In a rail-to-road intermodal journey (and vice-versa), containers can be transferred from one mode of transport to another,
Rail transport, for instance, is more fuel-efficient than road trucking. In a rail-to-road intermodal journey (and vice-versa), containers can be transferred from one mode of transport to another,
Route optimisation
Route optimisation can be implemented using transportation management systems, which allow shippers enhanced control over journey sequencing, load planning and tendering, and more. This helps shippers, forwarders and carriers reduce costs and secure timely deliveries in short windows. FTL shipping can also be strategically used to boost drop density and load optimisation.
Contingency planning and risk management
Businesses across the globe are re-examining their logistics processes to allow room for greater flexibility. As a result, contingency planning is rapidly gaining prominence. It makes the movement from reactively managing risk to pro-actively preparing for disruptions.
One of the first steps is ensuring end-to-end visibility over shipment journeys, as enhancing freight transparency is the best way to identify or anticipate problems and respond in good time.
Business continuity planning and risk assessment is another tried and tested way to ensure shippers can deal with uncertainties across the supply chain. Properly educating drivers and other employees on what steps to take during emergencies and other unexpected situations can also work towards a risk-aware culture across your organisation and the wider supply chain.
One of the first steps is ensuring end-to-end visibility over shipment journeys, as enhancing freight transparency is the best way to identify or anticipate problems and respond in good time.
Business continuity planning and risk assessment is another tried and tested way to ensure shippers can deal with uncertainties across the supply chain. Properly educating drivers and other employees on what steps to take during emergencies and other unexpected situations can also work towards a risk-aware culture across your organisation and the wider supply chain.
Navigate the road ahead with Amazon Freight
Whether you’re a shipper, forwarder or carrier, supply chain uncertainty is a reality for those involved in logistics. At Amazon Freight, we take strong measures to prepare shippers and partners for disruption: from weather warning to safety alerts and real-time responsiveness.
For further insights into the challenges and opportunities in the freight industry, you can also read a new report by economist Dr. Rebecca Harding: “UK and DE Freight Trends: 2024 and Beyond”. The report, which is sponsored by Amazon Freight, provides leading analysis on global logistics right now and over the coming years.
We’re with you for the long haul. Get in touch today at freight-uk-interest@amazon.com to find out more about how we can help.to find out how Amazon Freight supports your business with fast and hassle-free shipping, or get started by creating your free shipper account and receive an instant quote.
For further insights into the challenges and opportunities in the freight industry, you can also read a new report by economist Dr. Rebecca Harding: “UK and DE Freight Trends: 2024 and Beyond”. The report, which is sponsored by Amazon Freight, provides leading analysis on global logistics right now and over the coming years.
We’re with you for the long haul. Get in touch today at freight-uk-interest@amazon.com to find out more about how we can help.to find out how Amazon Freight supports your business with fast and hassle-free shipping, or get started by creating your free shipper account and receive an instant quote.
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