The pandemic has ravaged most enterprises, with the notable exception of technology. Freight forwarders are feeling the drop in demand as the market for ocean freight from China continues to plummet.
Many freight forwarders have turned to technology as a way to get leaner.
The efficiencies created by the cloud computing revolution are helping freight forwarders survive in tough times. If demand returns to pre-COVID levels in the next few years, many may be able to use technology to stay lean as higher demand pushes up revenues.
The “Made in China” era appears in danger of passing into history, at least for the United States. The trade war was already crimping demand before the pandemic spread across the globe. When COVID-19 added the second blow to China’s export market, it experienced the sharpest decline in demand in 16 years. As fear of infections and safety concerns took hold, companies had little choice but to alter their supply chains away from China. Recognizing the danger of having too many eggs in the China export basket, many enterprises are considering a permanent reduction in Sino imports.
Air Freight Prices Soaring
The pandemic has had a counter-intuitive impact on air freight prices. With air travel banned or greatly reduced throughout the world, one would think the air freight rates would fall. However, the lion’s share of air freight travels in the cargo holds of passenger airliners. With flights cut so drastically, there is now competition for the scarce cargo hold space available.
Along with the reduction in available cargo space, a demand surge for personal protective equipment from manufacturers in China greatly increased air freight demand. Because the United States has grown so reliant on China to manufacture medical equipment, the country could not muster the capacity to meet surging COVID-19 related demand. To keep the supply chain from breaking under the strain, airlines have resorted to increased freight flights, reduced ground time and deferred non-essential maintenance.
The New Importance of Road Freight
The pandemic has also increased the importance of road freight. As more manufacturing has moved back to the United States, truck drivers have been busy carting essentials to communities that need them. The result has been more frequent, shorter trips with far fewer traffic delays.
How Freight Forwarder Software is Helping Mitigate COVID-19’s Damage
Cloud-based freight forwarder software help logistics companies improve responsiveness and prevent supply chain interruptions. Freight forwarder software streamlines back office operations, reduces the burden of regulatory compliance and provides second-to-none global trade flow analysis. Before cloud computing, freight forwarders relied on teams of workers to coordinate logistics in an office setting. When the pandemic forced offices to close, the software allowed freight forwarders to nimbly shift their staff to a work-from-home model.
The software allows employees to log in, work and communicate 24-hours per day. Customer support and logistics coordination are unaffected by the change in work environment. With personal protective equipment in such dire demand, this ability to adapt proved essential to the pandemic response.
Cloud-based freight forwarder software also offers the advantage of a streamlined customs declaration process and more efficiently executed security filings, saving precious time. The software also provides A.I. driven analysis of shipping patterns, helping identify new sales opportunities.
Because of advances in artificial intelligence, freight forwarders are also able to accomplish the routine aspects of the logistics business without the high degree of labor intensiveness required in the pre A.I. era. With business falling off in so many areas, the cost savings on payroll have allowed freight forwarders to survive while still maintaining their standards of customer service and logistics professionalism.
The pandemic has brought changes to so many industries. For freight forwarders, the decrease in demand has been particularly challenging. Cloud-based freight forwarding software has allowed them to streamline operations, resulting in efficiencies that help balance expenses with the COVID-era shock to demand.
In addition, it has allowed essential operations to continue uninterrupted despite office closures, helping to keep emergency supply lines open as personal protective equipment was rushed into the country. As the pandemic era fades and demand returns, freight forwarders will be able to continue operating with enhanced efficiency and boost profits.
Freight Forwarding Software Solutions
CSA Software has been developing and offering full-service software solutions for domestic and international freight forwarders for over 35 years. Our Cloud-based solutions are designed to be cost effective, extremely powerful, flexible and scalable ensuring long term growth.
We offer a full suite if software products including Transportation Management, Warehouse Management, Ocean Freight Management, Air Freight Management and more. Call us and speak with a specialist about your Free Demo!