Rising, erratic rates keep freight forwarders awake at night

At the three-day Freight Summit industry experts, leaders and innovators gathered under one roof to share knowledge and focus on how data can improve connectivity in global supply chains



Sultan Ahmed bin Sulayem, group chairman and CEO of DP World, addressing the summit in Dubai on Monday. — Supplied photo
Sultan Ahmed bin Sulayem, group chairman and CEO of DP World, addressing the summit in Dubai on Monday. — Supplied photo
by

Issac John

Published: Mon 14 Nov 2022, 5:25 PM

Rising and unpredictable freight rates and lack of financing options remain a major challenge for the freight forwarding industry while inflation and geopolitical tensions are set to dominate concerns for the global supply chain over the next five years, according to a DP World study.

The survey, showcased at the Global Freight Summit that opened on Monday, paints a stark picture of an industry in turbulence, with climate change and access to talent weighing heavily on business resilience and the ability to create seamless supply chains.

The summit was inaugurated by Sheikh Ahmed bin Saeed Al Maktoum, President of the Dubai Civil Aviation Authority, Chairman and CEO of Emirates Airlines and Group, and Chair of the World Logistics Passport (WLP) Global Steering Group.

"Global supply chains are significantly impacted by the pandemic, geopolitical tensions, and the looming threat of the global climate change crisis. In fact, these challenges have demonstrated that many parts of the global supply chain infrastructure are fragile," said Sultan Ahmed bin Sulayem, group chairman and CEO of DP World.

The survey found that the biggest worry that keeps 80 per cent of freight forwarders awake at night is the rising and unpredictable freight rates. The lack of financing options is another major issue, with 37 per cent of those surveyed saying this has a crippling effect on their ability to deliver goods.

While some 63 per cent of the freight forwarders, who took part in the survey, said inflation is the main concern, 56 per cent cited geopolitical tensions as another major cause of concern. This is having major ramifications for businesses. Around 10 per cent of the respondents said they had changed the markets they do business in due to uncertainty. Indeed, these worries look set to dominate the thoughts of freight forwarders for years to come. Some 78 per cent said they expect geopolitical tensions and inflation to remain concerns over the next five years, with two-thirds (66 per cent) of freight forwarders believing it is impossible to say when economic disruptions will subside.

Sulayem said those rising concerns make it imperative for logistics operators to come up with the tools and solutions that offer real-time visibility across the entire supply chain. “This can allow trade routes to be fit for purpose, and thus facilitating a more seamless movement of trade around the globe."

At the three-day Freight Summit industry experts, leaders and innovators gathered under one roof to share knowledge and focus on how data can improve connectivity in global supply chains.

"The uncertainties of today’s world are making trade harder and it is increasing the disconnect at various points across the whole supply chain. The freight forwarding community must come together to act now to mitigate risk so that we can build towards a more resilient future,” said Mike Bhaskaran, group chief operating officer, Digital Technology at DP World

Three-quarters (75 per cent) of the respondents said they expect technology to be a significant factor in easing the current supply chain woes. In fact, more than half (56 per cent) believe digitalisation will be the single biggest driver of efficiency, reducing bottlenecks and supporting the industry going forward. Technology will have a considerable impact on the supply chain, with three in four saying it will lead to cost savings and a greater ability to target and deliver to new customers.

While the pandemic has disrupted every industry, including logistics, it has resulted in several positive benefits. A third of freight forwarders said it prompted a much-needed overhaul of their business, with 41 per cent saying it has changed how they track cargo. Over half (54 per cent) said it has increased pressure on management to operate more sustainably.

— isscjohn@khaleejtimes.com


More news from Business