From the ongoing impact of the COVID-19 pandemic to the blockage of the Suez Canal and the war in Ukraine, supply chains have been repeatedly tested over the past few years. Other challenges facing the international freight market include staffing shortages, capacity issues, inflation, and peak demand. In 2023, the congestion that plagued the logistics industry the most is easing, but new problems are emerging, as well as the possibility of growth. The past few years have clearly shown that being prepared is the key to the survival and thrive of international logistics businesses, no matter what the circumstances.
Freight forwarders may be further consolidated
It is already an indisputable fact that trade protectionism has re-emerged in the shadow of the financial crisis. In particular, the nature of recent trade restrictive measures is not temporary measures in response to crises in the past, but rather to protect one's own national industry through these measures. The Chartered Institute of Procurement and Supply (CIPS) says this trend is one of the ones to be watched globally. It has identified food and oil as common targets for protectionist programs, but the range of affected product categories is expanding. These programs are designed to provide protection during the crisis, but the continued rise in their adoption could have a huge impact on the freight forwarding industry. It reinforces freight forwarders' need for the future of their supply chains, ensuring that they are dynamic, agile and flexible in order to be prepared for any supply chain disruptions and have the ability to respond effectively and quickly.
The global freight forwarding business is highly fragmented. M&A has been increasingly active over the past two years due to uncertain and volatile conditions. As the economic situation deteriorates, freight forwarders are likely to consolidate further in 2023 as companies seek to improve their capabilities and geographic coverage.
The Chinese dream of "going out".
China's freight forwarding enterprises "going out" has become a trend, but it has not yet been able to form a scale, and the improvement of the international competitiveness of China's freight forwarding enterprises still needs a long process. China's freight forwarding companies have not yet formed the support of the global supply chain, and there is a lack of mechanism guarantee, which also contains investment risks such as personnel changes.
At present, freight forwarding companies choose different "going out" paths according to different scale and strength: especially in cross-border e-commerce logistics, such as overseas warehouses and tripartite logistics fleets. For medium-sized freight forwarding enterprises that do not fully possess the advantages of talents and funds, they can provide freight forwarding services around the overseas projects of Chinese foreign investors.
International rail transport is developing rapidly
With the gradual advancement of the national railway reform, combined with the development of the market economy, under the goal of carbon neutrality, railway transportation will continue to earn, the future of the national railway freight car ownership will continue to rise, the proportion of railway freight traffic will continue to increase, the cost of railway transportation is also significantly lower than road transportation, with the opening of the China-Laos railway nearly a year to transport more than 10 million tons of goods, the future of the ASEAN railway market can be expected.
Russian direction
The Ukrainian-Russian crisis will continue in 2023, and with the confrontation between Russia and the West, the policy will be more inclined to the East. With the opening of the container express route from Vostochny Port in Russia to Taicang Port in China by Chinese enterprises in 2022, source enterprises and logistics companies can arrange packing and loading in advance according to the departure time, and assemble at Vostochny Port in Russia on time, so that the liner can be loaded and departed immediately after arriving at Vostokhe Port, so as to maximize transportation efficiency.
For the Russian side, a large number of electronics, light industry and textile products needed by Russia will be shipped back, and at present, this route can effectively radiate China's Yangtze River Delta, Pearl River Delta and other regions. It is of great practical significance and far-reaching historical significance for the construction and development of the land-sea intermodal transport corridor for both China and Russia.
The main ways of freight transportation in Russia at the moment:
1. Russian air transport
Advantage: The transportation time is the fastest, suitable for transporting goods with relatively small volume and tight time requirements. Disadvantages: The transportation price is relatively expensive, which increases the transportation cost.
Second, Russian shipping
Advantages: Freight is relatively cheap and insufficient: the transportation time is relatively long, and the influence of the weather is relatively large, and the goods to landlocked countries cannot be transported.
3. Road transport
Advantages: flexible, simple and fast, strong emergency, relatively small investment, relatively fast results, relatively fast timeliness. Disadvantages: The load is not very large, and the large machine weighing up to ten or twenty tons is not very suitable, and the cost is more expensive than that of sea and railway transportation.
4. Russian railway transport
Advantages: the transportation speed is faster than that of sea freight, the carrying capacity is relatively large, the influence of the weather is relatively small, the accuracy and continuity are relatively strong, and the overall transportation time is shorter than that of sea freight. The railway network covers a comprehensive range of containers, and the transportation is very convenient, and it can be used for FCL and LCL. If you want to export bulk goods to Russia, then the all-rail transportation method is the best choice for Russia. The cost is lower than that of car transportation, and the timeliness is faster than that of sea transportation. Disadvantages: Compared with sea freight, the cost of rail transportation will naturally be more expensive.
5. Sea-rail combined transport
Advantages: If you look at it in the near future, sea-rail intermodal transport should be regarded as the least cost-effective one. Because the time of sea-rail intermodal transportation is relatively long, the freight is only a little less than that of full railway transportation.
Digital freight forwarding continues to grow
Digital transformation is happening in most industries, and freight forwarding is no exception. The underlying reconstruction of the logistics link involves people, goods, vehicles, fields, and roads, and each link has the opportunity to create new value and potential business opportunities. Digital freight forwarding uses technology to coordinate and control processes. Companies in the industry are also paying more and more attention to digitalization, traditional freight forwarding software can not play the operation of management and process tracking, digitalization has the opportunity to reconstruct the underlying link of the logistics industry, improve the overall efficiency of the industry, and then create value.
2023 is going to be another extraordinary year for the freight forwarding industry, and you need to be prepared for any challenge!