The continuously falling freight rates cause pressure to lower the freight forwarding costs. This forces the container shipping industry to find improvements for the construction of ships. Also, freight forwarders are relying on technological progress starting at the organization of cargo shipments.
For more than seven years, the once booming container shipping industry has been in a crisis. The prices for cargo shipping are continuously falling and freight forwarders are filing for insolvency on a daily basis. Everywhere around the world, freight forwarders are dependent on improvements to lower the forwarding costs and to be able to do transports in a way that covers the expenses.
Freight forwarders are using ships that keep getting bigger
Since the fuel consumption and the staff costs are growing more slowly than the size of the ships, by no most of the freight forwarders are using giant freighters and improvements within the container shipping for enlarging the ships. Not only can freight forwarders more often do without the use of ballast water by using ships that keep getting wider, thanks to the growing loading capacities they can also continuously lower their forwarding costs. Though the so called Postpanamax and Capesize ships of freight forwarders have become so big, that by now they cannot ride through the Panama and Suez Canal anymore. The freight forwarders are saving costs with them especially by the sea cargo transport between Asia and Europe.
Improvements that reduce pollutants play a minor role for freight forwarders
In addition, freight forwarders can lower the cargo forwarding costs by expanding their fleet with ships that have low fuel consumption. This was possible for example thanks to the lightweight construction with new materials and the optimizing of hull shapes, but also thanks to using renewable energy for operating the freighters. However, research in this area is only advancing slowly, due to the price for marine diesel that has been falling strongly in the year 2015 and the therefore dwindling interest of freight forwarders in ships with low consumption. The share of bunker in the freight forwarding costs are so low right no, that instead of using freighters with technologies that reduce pollutants, freight forwarders are even rather accepting longer drives for the cargo and therefore higher emissions to avoid passage fees on water ways. The environment is the one that has to pay the price for the forwarding costs that the freight forwarders are saving.
Staff costs are becoming more important for freight forwarders
Beyond technical improvements in the ship construction area, also the staff costs are becoming more and more important for freight forwarders in order to lower the forwarding costs. So far, lowering costs in this area have only been possible by wage dumping. But thanks to digitalization, the freight forwarders have now possibilities to lower the staff already at the processing of requests by automating processes. For example, by now it is possible to make updates about the shipment’s current status automatically accessible via an online system. So far, this had to be done mostly manually by freight forwarders. With that, the freight forwarders are not only reducing their transportation costs when shipping cargo, they also offer their clients an easier and less complicated way to check their cargo’s status.
