Don't Tell Me Why it's Happening, Tell Me What to do About It: Managing the Supply Chain Struggles of 2024

Author Greg Amanatidis
Read Time 3 Minutes
Category Insights

There has been plenty of coverage about the current peak in demand for sea freight, which is wreaking havoc on supply chains around the world. We all know about the constraints on capacity due to the Red Sea, the peak in demand, which far outweighs the supply of both space and containers and the consequent rise in freight rates.

It’s great to be aware of these factors, but as a Supply Chain Leader, just hearing this news doesn’t really help me. What I really need to know is, what can I do about it right now? I can’t change the situation, and I know that rates will be higher than I’d like to pay, but what actions can I take to help ensure my costs don’t blow out more than they already have? How do I ensure my supply chain is reliable and predictable through the rest of 2024?



These are the questions supply chain managers want answered, and in this article, we will give 5 tips that you can take action on right now.



1. Consolidate Where Possible


It may seem rudimentary, but many importers and shippers are not taking full advantage of what they already have. Now is not the time to waste space. Consolidate shipments that do not make up full containers.

Asses your LCL shipments and whether you could combine these to fill up a full container. This way you’ll be maximizing your space and saving costs. Another way to consolidate could be to ask suppliers to hold orders until you have a full container’s worth, or consolidate orders from different suppliers into one box.

This may be obvious, but these small adjustments can make a big difference over the course of weeks or months (or some undefined period that these capacity issues could last).


2. Optimize Sourcing and Routing


Given the congestion across many ports in Asia and Europe right now, reassess the routes your goods travel and where they come from.

Firstly, see if you can source goods from a location that will offer better transit times/pricing, even if it is temporary.

Secondly, ask your freight forward to reconsider the transshipment ports your goods travel through. For example, you could opt for a transshipment somewhere like Kuala Lumpur, Thailand or Hong Kong instead of Singapore or see if a direct service is available. Even if it is slightly more expensive, it could be the difference between your goods getting to you on time or not.

A good freight forwarding partner will have multiple options to help here.


3. Get Creative with Shipping Mode



Now is a good time to be creative with your mode of transport. Consider combining shipping modes so that your goods can move through less congested locations. Given the lower demand for moving through those ports, this way, you may also save on costs.

Like one of our customers, you may struggle with container availability at one port, so you might have your goods picked up from your supplier in one part of China and moved by road/rail to another port where equipment is available for uplift.

There is a myriad of options here, but it’s important to keep an open mind and think outside the square so that your goods don’t get caught in the crossfire of congested ports or without containers.


4. Lean on Your Forwarder’s Expertise


You may think of your freight forwarder as a facilitator in the movement of cargo from one location to another.

However, the true value of a freight forwarder is not in their ability to move your goods; it’s their expertise. Don’t forget, you’re not just paying for a freight movement; you’re also paying for consultancy, so take advantage of it.

Working with a multinational conglomerate can sometimes feel transactional, rather than a partnership. The interaction can sometimes feel impersonal, and you’re limited to working with their own offices at origin.

Working with someone like Navia means two things: dealing with a team with an intimate understanding of international freight as a partner, and access to a host of network partners with whom we collaborate to find solutions.

This means that if you give us a problem, our team have the nous and experience to find a solution, plus we are not limited to working with our own offices (we can get creative with partners).


5. Add a Buffer to Your Lead Times



Again, this may seem painstakingly simple, but factoring in disruption into your lead times will save a lot of heartache later in the supply chain. In accounting for delays, you are setting appropriate expectations for your receivers.

By letting those waiting for your goods know that they will take longer than expected, you are also reducing your team’s stress. You are giving them precious time to handle delays when they pop up.

A receiver who understands the extension of lead time is less likely to become frustrated with delays as they’ve now also been accounted for in their process.


6. Make a Plan for Future Disruptions



Although this action will not yield an immediate result, you can take action right now. It’s safe to say that surges in demand and congestion will occur again. It is not a matter of if they will rear their heads, but when.

What you can do right now is: plan for a just-in-case inventory model so that you are never caught short of stock and start to negotiate flexible contracts with your forwarder. Negotiating a flexible contract with both NAC and FAK capacity means that you’ll be able to take advantage of cost-effective rates during slack but also have some confirmed capacity for when demand surges.

As the adage goes, failing to plan is planning to fail, and your supply chain is no different.

So make a plan, now.


This Is Going To Hurt


Ultimately, no matter what you do as a shipper or importer, it’s a difficult time for supply chains. Freight rates are high, congestion is mounting, and container availability is constrained. You won’t get everything you’re looking for, and there will be a need to compromise (do we ever get everything we want?). By focusing on what is in the sphere of your control as a supply chain leader, and doing the above, we can help mitigate the strain this has on our supply chains.


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