How a Well-Appointed Distributor Can Alleviate Freight Challenges
Exporters across the globe are currently facing freight challenges, stemming from disruptions in key shipping routes and a shortage of in-demand container sizes. Incite's Sales Team shares tips on how a well-appointed distributor can help alleviate some of these challenges.
Current freight challenges:
For exporters in the Northern Hemisphere, the disruptions in the Panama Canal due to drought and subsequent water shortages mean:
Increased Shipping Costs. Exporters will face higher shipping costs as vessels will have to take longer routes or make multiple trips due to the draft restrictions in the Panama Canal. This increased cost will either reduce profit margins or necessitate raising prices for customers to offset the added expenses (IMF) (Home).
Longer Delivery Times. With ships rerouted around the Cape of Good Hope to avoid the canal, delivery times will increase by an average of 10 days, but often much longer. This extended transit time can lead to delays in fulfilling orders, potentially affecting customer satisfaction and contract obligations (IMF) (Home).
Supply Chain Disruptions. The congestion and delays at ports due to rerouted ships contribute to broader supply chain issues. Exporters might face difficulties in maintaining inventory levels and meeting demand, leading to potential out-of-stock or overstock situations. Planning and logistics will become more complex and require more robust contingency strategies.
How a well-appointed distributor can help
For exporters navigating these freight challenges, partnering with an effective in-market importer and distributor becomes invaluable. Leading distributors across Southeast and North Asian markets are importing goods on a weekly basis from global sources, usually under FOB terms, thus reducing the burden on exporters. The advantages include:
Increased Efficiencies. Importers and distributors have dedicated logistics and freight teams that stay abreast of the latest developments in global shipping. This expertise allows them to optimise shipping routes and consolidate shipments when possible, reducing the need for full container loads if that is the preference. Additionally, the volume of goods handled by distributors can lead to more favourable pricing and terms for freight.
Enhanced Stock Management. Given the current complexities in the freight market, effective stock management is crucial. Retailers rely on consistent product availability and gaps on shelves can damage customer trust. Renowned distributors offer sophisticated inventory analysis and management, ensuring steady stock levels are maintained with considerations made for shelf life.
Operational Peace of Mind. Export Managers often juggle multiple responsibilities. By partnering with a reliable in-market distributor, exporters can focus on their core business activities while the distributor handles the intricate logistics and operational challenges in their market.