The acceleration of globalisation and trade has been a knock-on effect, making air freight more expensive and unreliable, leading to an accelerated switch toward sea freight transportation. This article will discuss the difficulties in implementing a modal shift in a globalised environment affected by supply chains disruptions.
Switching to sea freight, a practicable solution to build supply chain resilience
When it comes to modal shift, it generally involves switching from one transportation mode to another. Carbon emission, expensive costs, supply chain disruptions can all be valuable reasons to rethink the way goods are transported worldwide. The most commonly used modal shift is from air freight to sea freight. During the pandemic, the air freight industry crisis has spawned the need for reshaping modes of transport, leading to a massive switch toward sea freight transportation. Due to capacity reduction and volatility in the prices, shippers are now facing challenges in achieving both cost-effectiveness and service quality in their supply chain.
What gains can we expect from the transition from air to sea freight?
Sea freight is one durable alternative with many advantages such as cost and delivery management. But a new parameter is now in the equation: environmental impact. Building on their green consciousness, more and more players seek to reduce their carbon footprint. With lower CO2 emissions, sea freight transportation can be a viable option. Our use case with Michelin has revealed that 40T of CO2 has been saved for each shipment thanks to a safe modal transfer. The concrete example of Michelin highlights that it can cost up to 10 times cheaper than air freight.
All of these persuasive arguments have aroused growing interest in the supply chain for the last few years. However, the actual efficiency of a modal shift lies in anticipation of key needs shippers want to address based on their operational trade-off.
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Tracking solution for better reliability
This air freight crisis was seen as an opportunity for supply chain operators to challenge the existing schemes relying on air freight. Victim of its success, the sea freight industry has begun to experience some issues with an increasing container shortage and price increases. Many visibility blind spots could be reduced with a tracking solution. However, there is no magical solution to supply chain disruptions, but only flexibility and visibility are key to success. By making the right adjustments in your logistics operations, evaluating your priorities, and better monitoring your flows, supply chain resilience is within reach.
The growing climate issue is pushing companies to think about the most sustainable mode of transport possible. Little by little, maritime transport is becoming the most relevant. However, the trade-off logic shows that this choice is also made with drawbacks, such as the reliability and visibility of its transport. Inefficiencies that could be improved through real-time monitoring of the safe execution of your logistics.
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