High shipping costs are driving inflation, or perhaps inflation is driving high shipping costs. Either way, shippers must adapt to inflation by implementing adaptive supply chain models, localized carrier networks, and transparent logistics infrastructures.
Diagnosing the problem with shipping costs
In June, legislation was passed to reduce prices and alleviate bottlenecks. The legislation aims to prevent shipping companies from taking advantage of American families, farmers, ranchers, and businesses. It prevents ocean carriers from controlling the world’s shipping volume. Still, it doesn’t address what many suppliers cite as the root cause of supply chain issues: shipping cost increases.
The current administration mainly targets three alliances of shippers that manage 80% of container capacity. The World Shipping Council responded with a statement pushing back against Biden’s criticism, calling for infrastructural investments from the United States government.
“As long as America’s ports, rail yards, and warehouses remain overloaded and unable to cope with the increased trade levels, vessels will remain stuck outside ports to the detriment of importers as well as exporters,” according to the council.
Regardless of who is to blame for shipping costs, inflationary price increases are at a four-decade high. Shippers must adapt to inflation with resilient, transparent, and integrative workflows.
Choose flexible and agile supply chain models
Many shippers are looking for more agile and flexible supply chain models to adapt to an inflationary market. These models rely on predictive algorithms, real-time tracking, and production automation to meet short periods of high demand and long periods of low demand. Flexible models prioritize access to a wide range of suppliers, especially suppliers accustomed to fluctuating traffic. Agile supply chains also virtually integrate processes to adapt to fluctuating carrier availability. For flexible and agile supply chain models to work for shippers, a robust TMS is necessary.
Localize and expand carrier networks
The simultaneous expansion and localization of carrier networks are essential for shippers that have grown dependent on some areas of the globe for production. Supply chains are getting shorter, and with that trend comes a call for shippers to develop more long-term relationships with local carriers.
A robust TMS can help with reducing shipping costs. CTSI-Global’s Honeybee TMS provides access to over 20,000 carriers so shippers can expand their networks and find the best rates without sacrificing the quality of service. Honeybee TMS also offers 60 years of continuously updated data reporting so that supply chain managers can respond to disruptions in real-time. As shippers expand their networks, having data that guarantees quality makes all the difference.
Increase visibility with transparent logistics
While there’s no quick fix for inflationary shipping cost increases, shippers can adapt to inflation with logistics systems that easily compare carrier rates, keep track of changing tariffs, and monitor the efficiency of global shipments in real time.
This level of transparency requires a logistics platform that can integrate all modes of transportation. Robust predictive algorithms are also essential to manage inconsistent volume and price increases. CTSI-Global works with content providers such as Strategic Technology Partners and BI Analytics to provide the analytical systems that shippers need for demand forecasting. With adaptive supply chains, solid logistics management, and a capable TMS, shippers can adapt to inflation long-term solutions.
Honeybee TMS access to real-time data allows suppliers to find the best rates and delivery quality while building long-term relationships with a network of vetted carriers. Don’t let the effects of a fluctuating market sneak up on you. Contact CTSI-Global today to talk about how you can adapt to inflationary price increases.