Four Common Oversights in International Shipping
Shipping ought to be straightforward in today’s connected world. But there are plenty of pitfalls waiting to catch out the unwary.
Here are four common oversights that can cause problems for importers and exporters.
1. World Events – Contingency planning
Anyone who exports or imports goods is aware of world events and the effects they have. Chinese New Year for example, where China effectively shuts down for four weeks in late January, has a market effect on prices and timings.
Freight forwarders and shippers have years of experience planning contingencies for such events, because they are predictable and expected.
Less predictable, however, are natural events which can have a much greater effect on market prices. Hurricanes and cyclones are seasonal, but it is often the unexpected natural events on land that cause the greatest delay. Witness Snowmageddon in the US last year.
You should be free from these hassles , your freight forwarder should give you the best advice on possible issues, including a complete run-down of the best times to ship, and when and how to avoid the worst gridlocks.
2. The Volatile Market
Don’t be surprised if the cost of shipping on any given day or week changes. It’s the nature of the current market that prices are up and down like a yo-yo.
In January 2016 alone, there was as much as a 36% variation in price from one week to the next. We discuss what causes this in our special report on price volatility – Stormy Seas and Bumpy Rides. Download the report HERE
Quoting for the same requirements on different days may see drastically different results.
Three quotations provided by three companies to exactly the same methodology may provide a hugely different view of who’s cheap and who’s expensive.
The quote is the best price at a given time. Why play the market yourself, when you’ve got professionals on hand?
Be clear about your requirements. Ask about price movements, and ask your provider to help you get the best price rather than just a price for comparison.
3. Budgeting in a falling market
On average, the cost of shipping is falling. This reduction has been occurring year on year for some time. There are many reasons for this, including low oil price and excess capacity, etc. (See our special report, Stormy Seas and a Bumpy Ride, for more details.)
The general fall of costs ought to be good for shippers. But, because of the volatility of the market, it is dangerous to assume that the price one week will automatically be lower than the price the previous week.
Price fluctuations vary greatly depending on when shipping takes place or when the a quote is given. Which means that budgeting is not straightforward.
Working with a freight forwarder you trust can help you budget smart. By understanding your budget requirements, your freight forwarding partner can insulate you from risk in the market.
4. Comparing apples with apples
In a price driven market, it’s normal for commercial organisations to benchmark prices through quotations. But, if you do this with shipping, you’re not “comparing apples with apples”.
Look for transparency, and seek out the professional advice that gets you the right balance of dependability, righttime delivery with confidence and minimal hassle.
Avoid the issues by talking to the right people
Using a regular, trusted freight forwarding partner can help you alleviate all these problems. Talking to your freight forwarding partner before you seek out quotes or book your shipping is vital, so you can make sure you get the best deals and don’t fall prey to the most common mistakes in the import/export business.
For more information about the current state of the shipping market, download our report – Stormy Seas and a Bumpy Ride.
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