Sea Freight – Challenges and Opportunities
Supply chain woes have been topping the news agenda for a while now, with everything from the COVID-19 crisis to Brexit, and now the Russian invasion of Ukraine cited as reasons for product shortages and the struggles moving products from one part of the world to another.
However, one element of the supply chain which gets relatively little attention are the struggles and challenges faced by the sea freight business. Preferred by companies seeking more sustainable and profitable alternatives to air transport, sea freight has risen in popularity recently, but unfortunately comes with its own set of issues.
Surging Demand
The sudden and significant increase in demand for sea freight services has led to a sympathetic rise in shipping rates across the board – particularly when it comes to shipping between Asia and the Americas.
The industry is also experiencing a global shortage in shipping containers. COVID-19 lockdowns, labour shortages, social distancing guidelines, and reduced global production levels, all conspired to reduce the number of ships able to be loaded with goods. This reduction in the number of shipments has meant containers have been stranded in other countries and not collected as part of the usual supply chain process.
Freight shipping is in the midst of a unique and unusual predicament,” report supply chain experts, Hillebrand. “An unforeseen cascade of events caused by the pandemic has us facing a worldwide container shortage crisis. It’s a crisis because the lack of containers has a ripple effect down entire supply chains, disrupting trade on a global scale.”
It seems unlikely shipping rates are going to fall until these capacity issues can be addressed and there is a slowdown in demand.
Delays are currently sitting at a record high with long waits for cargo ships all over the world. Vessels arriving at the busy port of Felixstowe in Suffolk could be waiting over a week to berth due to current congestion levels in the UK for example.
Opportunity
Sea freight is not without opportunity, however. As you can see from our selected news stories above, the pharmaceutical industry is discovering new ways to leverage oceanic logistics to its fullest.
Whether it’s the vaccine experts at BioNTech installing labs in shipping containers – although possibly simultaneously contributing towards the global shortage – and transporting them to developing regions to assist them in fighting the COVID-19 crisis or allowing brands such as Johnson & Johnson to make their logistics operations more sustainable and meet ambitious climate targets, sea freight clearly has a lot to offer.
Of particular note is the use of the method for vaccine labs. Because of the critical temperature storage requirements of some COVID-19 vaccines, they can be unsuitable for lengthy sea voyages. However, by shipping the lab by sea and then having the vaccines produced at the other end of the journey, this issue is cleverly sidestepped.
Final Thoughts
Sea freight is likely to continue to grow in demand as we move through 2022 and brands in the pharmaceutical space need to find innovative solutions to its many challenges whilst taking advantage of the opportunities it presents. Those which achieve this are going to see significant advantages when it comes to getting their products from A to B compared to their competitors.