FourKites: Key challenges in ocean shipping

After a tumultuous three years for global supply chains, ocean freight stakeholders are under pressure from shifting economic conditions, geopolitical influences and labour challenges going into 2023. That’s according to a new survey released by leading real-time supply chain visibility provider FourKites.

The survey polled over 350 supply chain professionals to shed light on the top issues facing the ocean shipping industry. The survey revealed that the past few years of supply chain disruptions — including COVID-19, market volatility, global political conflict, material shortages and extreme weather events — have driven 73% of respondents to invest in supply chain visibility, with 46% planning to invest more in 2023.

“Shippers and other players in the supply chain ecosystem are getting smarter about allocations by tapping into more reliable and real-time data, instead of guessing,” said industry expert Chris Stauber, Founder of VentureSoftPM. “They want to know, for instance, what the risk-versus-reward will be for going to an extra port or country to move their containers, or for shifting from one supplier to three for raw supplies. Additional investment is required to get better data, but the value of that data brings a huge reduction in risk.”

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Other key survey findings include:

50% of respondents reported having zero visibility into their ocean freight, with more than 20% relying on manual track-and-trace processes to track their ocean freight.
More than half of respondents were most concerned about labour challenges, high shipping costs and impacts to customer service, with 35% also reporting concerns around congestion at the ports.
73% of respondents reported having some level of visibility into their over-the-road shipping.

The survey findings have been published in the report, The Great Reset: Ocean Shipping in a Post-Pandemic World. The report includes expert analysis on the current state of ocean shipping, predictions for 2023 and ways shippers can shore up their supply chains to build resilience for the future.

4 factors that put ocean shipping under pressure:
#1 Shifting economic conditions
#2 Bottlenecks at the ports
#3 Geopolitical influences on global supply chain networks
#4 Labor challenges

The report suggests the following four tip for weathering the ever-shifting ocean freight shipping:

1. Build resilient supply chains

Shippers should analyze historical performance of key carriers, lanes and ports alike — including recent trends in dwell, demurrage and detention fees.

2. Tackle ocean exception management

The benefits are significant, ranging from lower transportation costs and a reduction in demurrage and detention fees, to improved product availability and less spoilage — all adding up to enhanced customer satisfaction.

3. Don’t lose sight of sustainability

About 30% of ships have methods for cleaning their emissions, but the technology can be pricey. ”We’re also seeing some carriers experiment with biofuels, which are also expensive. I suspect as demand from shippers increases for greener transportation, ‘greener’ ships will get overbooked and carriers will increase their investments in green technology.” notes Mr. Chris Stauber, Ocean industry expert and founder of VentureSoftPM

4. Take advantage of end-to-end visibility

While 72% of FourKites survey respondents reported having invested in visibility in the past three years, a full 50% said they still don’t have visibility into ocean freight.

Concluding, FourKites highlights that ”flexibility is critical”.

As always, planning ahead and maintaining flexibility in every aspect of the supply chain is essential. Companies looking to succeed in 2023 and beyond should maximize flexibility in every mode of transportation they use — especially when it comes to selecting their transportation vendors and suppliers transportation — as well as where they source labor, products and raw materials.

…the report states.

EXPLORE MORE by reading the report here