Hello, it’s IINO.
I would like to broadcast IINO san’s Logistics Radio.
Today, I would like to talk about the theme, “Infor predicts, container shipping delay problem will continue until 2023.”
Daily Logistics Radio by IINO san in 13th Jan. 2022
Infor in U.S. Predicts Container Shipping Delay to 2023
Infor, a leading cloud and software company in the U.S., has made some interesting predictions and suggestions.
Infor released a report this year with predictions and trends for the supply chain in 2022, stating that port congestion and container ship delays will continue to be a problem until 2023.
The following two points are made:
1. Suggests to shippers to invest in technology for First Mile from where products are shipped and emphasize relationships with logistics companies.
2. Forecasting a prolonged upward trend in ocean and air freight transportation costs.
Focus on First Mile
As for the first point, let me explain First Mile.
First Mile is the part of logistics that picks up the product from the retailer and delivers it to the warehouse or distribution center.
In the case of B2B international transportation, this involves managing a company’s inventory, understanding the carrier’s transportation capacity, picking up the cargo, and delivering it to the warehouse.
This part of the process is still inefficient and lacks transparency.
I did some research on First Mile and found some information about DHL.
Just like their success with Last Mile, many companies are looking at First Mile and trying to improve efficiency and reduce costs in a highly competitive environment.
It says, it is important to focus on eliminating reliance on paper documents, and making it easier for companies to implement changes in their processes.
DHL also said that the growth of cloud-based transportation management systems has enabled companies to reduce inefficiencies and costs from First Mile while improving transparency and profitability.
Infor’s senior director and general manager predicts that, “the loading and unloading of ships and the movement of goods from ports to onshore warehouses and cargo depots will continue to stagnate.”
Congestion and delays at major ports in North America and Scandinavia are a problem for global supply chain networks.
The company has identified the following challenges;
-Labor force at ports
-Truck driver workforce
-Labor force for unloading from warehouses
-Use of empty containers and container chassis
In addition to these challenges, the company says that increased shipments from Asia due to “the highest consumer demand in history” are interacting with each other.
Therefore, Infor says that investing in technology for First Mile and focusing on relationships with logistics companies are essential to the resilience of a company’s supply chain.
To begin with, if First Mile goes bad, Last Mile will be affected.
The Need for Degitalization
Infor explains the need for IT, saying that companies must have a real-time view of their inventory in transit, as well as a comprehensive, multidimensional view of their freight capacity, suppliers’ work-in-progress, and financial health.
It also needs to strengthen error monitoring so that they can respond quickly to any problems that may occur on domestic or global shipping routes.
The conventional paper-based First Mile logistics management does not allow us to grasp problems on time.
I believe this is where the DX of the supply chain is headed.
Higher Transportation Costs
On the second point, Infor’s forecast, the long-term trend after 2022 is rising ocean and air freight costs.
This will not change even if the current congestion and capacity constraints subside, and shippers will increase their use of NVOCC and 3PL operators to secure freight capacity.
It seems that total logistics providers, not just shipping companies, are becoming more important.
As a logistics provider, it will be important for us to support the entire supply chain of our customers by using IT.
I found this article very interesting and I think it is important to understand the DX of the logistics industry and think about the future.
Please read the links to the related articles in the summary section.
That’s all for today. Thank you.