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Shipping rates are on the rise again, leaving logistics teams around the world struggling to secure capacity without stretching their margins too thin.

Bloomberg reports that many carriers are charging as much as 25% more than they were this time last year. And while spot rates and contract rates typically soften towards the end of May as new, year-long shipping contracts are inked, two years of increased demand and bottlenecked supply chains have placed a significant amount of pressure on the industry. Steady price spikes into the new fiscal year indicate that a “return to normal” isn’t in the short-term forecast.

Here’s everything shippers need to know about the current shipping landscape—and some steps they can take to prepare for future rate increases.

How high are shipping rates right now?

On June 1, 2021, major ocean carriers applied for a general rate increase (GRI) of $1,000 to $1,200 per 40-foot equivalent unit, according to a recent report from S&P Global. At a time of year when rates are usually at their lowest, a significant spike has pushed rates along many major shipping routes past record highs.

As of June 1, transpacific eastbound container rates are currently set at $6800/FEU, which is $400 higher than the previous record set back in January 2020. This is bad news for shippers who may still be recovering from pandemic-induced losses—and the worst may be yet to come.

How long will price spikes last?

Historically, peak shipping season begins in July. A steady rise in prices leading into a period of consistently high shipping demand doesn’t bode well for shippers seeking more sustainable rates.

“This will last into Lunar New Year 2022,” one source told S&P Global. “Peak season surcharges were always mitigated in years past, similar to GRIs, but we’ve never seen these types of increases.”

To put it simply, the shipping landscape has never really seen a consistent rise in rates quite like the one it’s experiencing right now. That makes it difficult for experts to predict exactly how (or when) the market will respond. It’s safe to say, however, that higher prices are likely here to stay, at least through the end of the calendar year.

What can logistics teams do to combat higher prices?

To offset rising shipping rates, many organizations are passing the cost off to customers. This can help protect the bottom line but runs the risk of making companies less competitive in the market. Others are investing in advanced logistics technology, which, despite involving an upfront investment, can ultimately save them money in the long run, even as shipping rates continue to rise.

An advanced transportation management system (TMS) makes it easy to source quotes from a vast pool of carriers and compare options. Logistics teams don’t have to spend hours on the phone, and shippers can always be sure they’re getting the best possible rate.

In addition to having a strong process on the front end, supported by leading-edge technology, shippers can avoid needlessly overpaying by relying on outsourced freight audit services that will catch any mistakes and process refunds. A high upfront rate isn’t ideal—but it’s even worse if erroneous accessorial charges are tacked on top or an invoice is accidentally duplicated.

Combined, TMS and freight audit data can also help shippers forecast future spikes—giving them time to prepare.

Combat rising shipping rates with smarter solutions

As shipping rates continue to rise, every penny matters. CTSI-Global can help you put them back where they belong—in the bottom line.

Don’t let rising shipping rates spell disaster. Contact us today.

The logistics function is often the unsung hero of the customer experience. As the final touchpoint between the company and the customer, it’s one of the last chances a shipper has to impress. But it’s also one of the most precarious moments in the relationship, with a high potential for something to go wrong. If a shipment arrives late or damaged, customers won’t remember the excellent service they received when they placed the order—they’ll remember how frustrated they were at the loading dock.

Logistics is too often viewed as merely a necessary expense rather than the highly strategic function it has the potential to be. But by striving for logistics excellence at every turn, supply chain managers and their teams can strengthen customer relationships, fuel loyalty—and encourage repeat business.

Automate the manual, focus on the human

Logistics teams are often so bogged down with time-consuming manual tasks that they can’t dedicate as much bandwidth as they’d like to improve the customer experience. By automating menial tasks that don’t truly benefit from the human touch, teams can dedicate more time and energy to giving customers white-glove service and performing strategic work that further enhances their experience over time. Automation also reduces the potential for human error to creep into logistics processes, bringing flawless service within reach.

Put in the legwork upfront

Putting additional thought and care into shipment planning can pay off in the form of a more seamless shipping experience and happier customers. Whether it’s paying close attention to exacting customer requirements—from strict temperature controls to additional security measures for high-value goods—or searching for the optimal route, focusing on this early step of the shipping process can have an outsized impact on customer satisfaction. Utilizing a transportation management system (TMS) will help, enabling a stronger, simpler, and more efficient planning process that delivers better results.

Prioritize reliability over cost

Saving money on a shipment can sometimes cost companies in the long run. The lowest cost carrier may ultimately prove to be unreliable, putting the customer relationship at risk. By balancing cost with reliability, considering every possible approach (including multi-modal options), and tracking carrier performance metrics over time, shippers can minimize potential problems likely to leave customers dissatisfied.

Communicate early and often

Customers don’t want to find out about problems when it’s too late to do anything about them. By using a TMS that provides in-transit visibility and automated alerts to ensure nothing is missed, shippers can keep customers in the loop about any issues that arise with their order. To really impress, the supply chain team can aim to find and deploy a solution before contacting the customer—giving them confidence that the company has their back.

Settle for nothing less than logistics excellence

A good delivery experience could be the difference between someone becoming a repeat customer and finding another supplier in a competitive marketplace. From an industry-leading TMS to intuitive outsourced solutions and beyond, CTSI-Global has the logistics technology and expertise you need to elevate your operations and show customers that your service can’t be beaten.

Take your logistics operations to the next level. Contact us today.

Almost six months into the UK’s formal separation from the European Union (EU), supply chain managers are still trying to smooth out disruptions caused by Brexit.

Brexit created a domino effect of problems along supply chains. Added bureaucracy and paperwork at customs checkpoints have caused major delays, which in turn has prompted some companies to move out of the UK—altering routes, adding tariffs, and radically shifting supply chains.

As the impact of Brexit continues to ripple across the global supply chain, a few trends are emerging in its wake. Here’s how some shipping managers are navigating Brexit-related challenges at their companies.

Extend shipping lead times

Empty shelves in Northern Ireland due to customs and certificate controls when shipping from Great Britain. Seafood exporters who failed to deliver perishable goods from the UK to the EU in time. It’s clear that complex customs declarations are causing considerable disruptions. That’s particularly true for shippers dealing with perishables that may require temperature-controlled conditions. The various causes—customs declarations, rules of origin checks, product safety certificates, and food inspections—are all part of the new Brexit world, and logistics leaders are trying to extend shipping lead times to accommodate the added bureaucracy.

Now more than ever, a comprehensive transportation management system (TMS) is essential for navigating a fast-changing landscape. CTSI-Global’s Honeybee TMS™ provides robust data and planning tools that can help shippers anticipate delays, recalibrate routes, and identify possible challenges. And with in-transit visibility, shipping managers can alert the necessary parties to delays—helping to preserve relationships.

Reassess shipping routes

With manufacturers hit by Brexit-related delays, some companies are pulling out of the UK in order to avoid dealing with ongoing disruptions and added expenses. This has prompted some supply chain managers to reorganize trade routes around new hubs.

While rerouting the supply chain in order to avoid going through the UK may help companies avoid incurring additional tariffs, they need to ensure they meet the shipping safety standards of all parties and locations involved. For instance, there may be a different interpretation of the rules around the movement of goods in different EU member states. Regional expertise is essential, as is business intelligence to guide decisions around where to place new distribution hubs.

Partner with the experts

From tax and customs documents to health checks, it’s vital for shippers to get up to speed on new Brexit requirements that, if not met, can cause major bottlenecks in the movement of goods. Keeping track of all the moving parts and fluctuating rules and regulations can be a full-time job—but you don’t have to go it alone.

An experienced international partner can help you navigate complex geopolitical shipping challenges and stay on the right side of the rules. With locations around the globe, including one in Dublin, Ireland, CTSI-Global is well-positioned to provide guidance and support around this and other major challenges global shippers face—so you can make informed decisions and develop a strategy that works for you.

Don’t let Brexit-related delays slow your supply chain down. Contact CTSI-Global today.