THINKING ABOUT FREIGHT FOR YOUR FUTURE PRODUCTS

When I talk to many of our customers about their product production, freight, and the need for allowing extra time in the delivery calculations, sometimes is not a factor of importance. However, in many cases, it can be the make or break for a product launch albeit a book, a brochure, a banner or the product itself.

Small individual products and the reliance on them turning up in the mailbox is becoming more and more accepted as the online ordering boom becomes the norm. By clicking the BUY button on a website a whole slew of procedures are actioned and one important factor is the freight. The computation values of the individual e-package wending its way half-way across the earth, or from any Australian major distribution point does not get enough credit.

The retail sector has become reliant on the practice and has built up customer expectation that your order, depending on where it is on the globe, will be with you in as little as 24 hours.

Not only will the timeframe be somewhat guaranteed, but a track and trace number is allocated and forwarded to you to check on its arrival. It is now becoming a trend to send you updates of the package and notify you it has been delivered. Some of this information is informative and some superfluous and some annoying, but it is all part of the overall push by online retailers to make your experience, one to remember.


Most, if not all, of these small diverse products, are sent by airfreight and arrive on time and in good order.

Remembering that the charges for air freight are based on the weight as well as the size of the product, any product between 3-5kg attracts a premium in freight charges. Yes, you can send large products, but uneconomically.

Seafreight, whilst economical for larger quantities albeit heavier items, attract another set of logistical issues especially into Tasmania, especially now due to Covid-19.

We are now in an unenviable situation, due to Covid-19 that global freight, especially by sea has a tremendous backlog, and is waiting for a respite to catch up. The problem has become heightened by the fact that even though production was only delayed temporarily in China, the demand for products has still not increased to pre-Covid levels. This has placed abnormal and erratic levels of freight from main sea freight collection ports and has created an increase in freight charges as well as a phenomenon called Blank Shipping within the freight industry.

One reason for Blank shipping is when there is not enough cargo in a scheduled port to justify the vessel to dock and load, so it simply bypasses the port and leaves the freight for the next scheduled visit. Alternatively, congestion within the port infrastructure creates a backlog of services and freight is not ready for loading. This then puts pressure on the shipping line to make decisions about whether to stop and waste time to load and therefore place an extra cost on the vessel. This can also result in the whole route or sailing being canceled due to the perceived extra cost making the scheduled vessel unviable.

All these uncertainties have created extra freight cost and scheduling issues that will not be elevated until a lull in production. One such drop in production should be Chinese New Year, one of the longest continuous holiday periods in China, but this is untested.

We expect these extortionary conditions to be with us for the best part of the 2021 calendar year and expect extremely tough times ahead for all importers and predict it will continue post-COVID 19.
 
Container space and schedules will change and will be limited. The possibility of restrictions being imposed by the shipping lines is not out of the question, so we recommend that you add 7-14 days to your into store date through to the end of 2021.

Please contact us to discuss your upcoming requirements and we can work through any issues, we are here to help.