Trade Wars and Freight Forwarding: Navigating Geopolitical Tensions in Global Logistics

In today’s interconnected world, global trade is the lifeblood of economies, facilitating the exchange of goods and services across borders. However, recent years have seen a surge in geopolitical tensions and trade conflicts, disrupting traditional supply chains and posing significant challenges for freight forwarding companies worldwide. In this blog post, we delve into the complexities of trade wars and explore how freight forwarders are navigating these geopolitical minefields to ensure the smooth flow of goods in global logistics.

Trade wars, characterized by tariffs, sanctions, and other protectionist measures, have become a prominent feature of international relations. The escalation of such conflicts, notably between major economic powers like the United States, China, and the European Union, has created uncertainty and volatility in global markets. For freight forwarders, who serve as intermediaries in the supply chain, these tensions translate into operational challenges and strategic adjustments.

One of the primary impacts of trade wars on freight forwarding is the fluctuation in shipping routes and transportation costs. As tariffs are imposed on certain goods, companies may seek alternative sourcing locations to avoid additional costs. This shift in supply chains necessitates the rerouting of cargo and the renegotiation of contracts, requiring freight forwarders to adapt quickly to changing trade dynamics. Additionally, increased tariffs can lead to higher transportation costs, affecting the competitiveness of goods in the global market and impacting the bottom line for both shippers and forwarders.

Moreover, trade wars often result in regulatory changes and compliance requirements, adding another layer of complexity for freight forwarders. With shifting trade policies and export controls, forwarders must stay abreast of the latest regulations to ensure compliance and avoid penalties. This involves investing in robust compliance programs, enhancing due diligence processes, and fostering close collaborations with customs authorities and regulatory bodies.

Furthermore, trade tensions can strain diplomatic relations between countries, leading to disruptions in logistics operations. For example, retaliatory measures such as port delays, cargo inspections, or even trade embargoes can hinder the timely movement of goods across borders. In such scenarios, freight forwarders must leverage their network of partners and agents to mitigate delays and find alternative solutions to deliver cargo efficiently.

Amidst the challenges posed by trade wars, freight forwarders are also exploring opportunities for innovation and diversification. For instance, some companies are investing in technology-driven solutions such as predictive analytics and supply chain visibility platforms to optimize routing decisions and mitigate risks associated with geopolitical uncertainties. Others are expanding their service offerings to include trade advisory services, helping clients navigate complex trade regulations and mitigate compliance risks.

Collaboration is key in navigating geopolitical tensions in global logistics. Freight forwarders are increasingly partnering with industry stakeholders, including shippers, carriers, and trade associations, to advocate for free and fair trade policies and foster dialogue between governments. By pooling resources and sharing best practices, the industry can collectively address the challenges posed by trade wars and work towards building more resilient supply chains.

Final Thoughts:
Trade wars present formidable challenges for freight forwarding companies, requiring them to navigate geopolitical tensions with agility and foresight. By embracing innovation, enhancing compliance capabilities, and fostering collaboration, forwarders can mitigate risks and seize opportunities in an increasingly volatile global trade landscape. Despite the uncertainties ahead, the resilience and adaptability of the freight forwarding industry will continue to play a crucial role in sustaining global supply chains and driving economic growth.

freight forwarding services in Kerala

How to scale up your business with freight forwarding.

Scaling up a business can be a challenging task, but with the right strategies and resources, it can be achieved. One of the essential tools for scaling up is freight forwarding services in Kerala, a service that helps businesses transport their goods from one place to another, both domestically and internationally. In this article, we will explore how freight forwarding can help scale up your business and the benefits of using this service.

  1. Streamline logistics: One of the biggest advantages of using freight forwarding is that it can streamline the logistics process, making it easier and more efficient to transport goods from one place to another. This can be especially beneficial for businesses that operate in multiple locations, as it allows them to coordinate their shipping and receiving processes more effectively.

  2. Access to a network of carriers: Freight forwarders work with a network of carriers, including shipping lines, trucking companies, and airlines. This provides businesses with a wide range of options for shipping their goods, ensuring that they can find the most cost-effective and efficient solution for their specific needs.

  3. Lower costs: By working with a freight forwarder, businesses can often negotiate better shipping rates and receive discounts on transportation costs. This can result in significant savings and allow businesses to reinvest those savings into other areas of their operations, helping to further scale up.

  4. Expertise: Freight forwarders have the knowledge and experience to handle the complexities of international shipping, including customs regulations, tariffs, and trade agreements. This expertise can help businesses avoid potential delays and additional costs, allowing them to focus on growing their business instead.

  5. Flexibility: Freight forwarding services can be customized to meet the specific needs of each business, allowing them to choose the services that best suit their operations. This flexibility allows businesses to scale up their operations at their own pace, without being tied to a rigid shipping schedule or incurring additional costs.

  6. Improved customer service: By using freight forwarding, businesses can improve their customer service by delivering goods faster and more efficiently. This can lead to increased customer satisfaction and, in turn, lead to more business and repeat customers.

  7. Reduced risks: Freight forwarders are responsible for ensuring that goods are shipped safely and securely, reducing the risks associated with transportation. This can provide peace of mind for businesses and help to avoid potential losses from damaged or lost goods.

Final Thoughts

Using a freight forwarding service can offer numerous benefits for businesses looking to scale up. From streamlining logistics and reducing costs to improving customer service and reducing risks, freight forwarding can help businesses grow and succeed in today’s competitive marketplace. By choosing the right freight forwarder, businesses can ensure that they have the support and resources they need to transport their goods and grow their operations.

The logistics sector in India for the year 2020 and the key areas that will drive significant growth.

Logistics is one such sector which has seen constant evolution over the past few years and is on a fast-paced growth in recent times. There is an upward trend in the global market and the same can also be said about the Indian Logistics Sector.

It won’t be wrong to say that the Indian logistics sector and the Logistics company in India is competing with many global logistics players of the most affluent countries. There is a great potential for improvements in many areas of logistics in India and hence this is the best time to understand the specific domains where one can invest time, money and efforts to achieve maximum growth.

Current scenario :
The growth rate of the Indian Logistics sector today is interconnected to every industry and has got integrated with technology and newer service providers. According to the latest world logistics index rankings based on the global logistics performance index, India has moved to the 35th rank from the 54th in the year 2014.

It is imperative to say that the Indian Logistics industry is the backbone of our economy and has shown massive improvement over the years. The Indian logistics industry in the year 2019 has been considered as the most promising and a year that has seen the quickest growth rates.

Based on official statistics the growth rate in 2019 can be largely attributed to the increasing number of e-commerce providers. It can be undoubtedly said that people have already started relying hugely on e-commerce for almost all their requirements and the same is said to continue in 2020 as well.

If we have to go by numbers, in the year 2019 the Indian logistics industry was valued at $160 Billion and with the present growth rates it is expected to be roughly around $250 Billion in the present year.

E-commerce has also attracted many FMCG and multinational companies into this space and has started creating many opportunities for the logistics industry to grow. Some of the areas which have had a direct impact are the inventory management and warehousing solutions of the retail industry. It has forced the retailers to find efficient warehousing solutions that facilitate better storage and also more responsive means of deliveries.

No wonder the Indian logistics industry which provides employment to more than 22 million people has shown a CAGR of 7.8 percent over the past five years and is expected to surge to 40 million by the end of 2020.

This is also because many companies are relying on the Indian logistics industry to help them better serve the ever-growing customized demands of Indian consumers. This is a very promising aspect of the current economy and in a way creates more jobs in the logistics sector.

Let us check out some of the key areas that will bring in substantial changes and development for logistics growth in 2020 :

Technology to be the backbone of Logistics :
Technology is going to be the driving force for many industries that will put businesses on a growth path and that too at faster paces. Technology in the industry has already started providing huge progress in the operational as well as various systems. Hence it won’t be wrong to say that technology is going to be the backbone of the economy that will be a primary tool in making it stronger and reliable.

Though adopting technology might be expensive but in the long run, it is going to give you more integrated, swift and error-free logistics operations. Technology such as AI, BlockChain, Machine Learning, and IoT are going to be implemented not just as a collection of fancy gadgets but as a means and methods to build a more robust foundation logistics in India.

Assurance of Indian Government for better infrastructural developments :
There has been a constant assurance from the Indian government about implementing more modernized and improved functional infrastructural development projects in Logistics. It has also assured that innovative measures will be introduced to help tap rural sectors as well. Projects as such will not only bring in more efficiency in the supply chain but also improve connectivity issues faced by geographically dispersed areas in the country.

Companies will be able to reach more untapped rural terrains and get a much wider customer base to serve in particular for the e-commerce sector. This, in turn, will be a huge opportunity for the Indian Logistics Industry.

Newer Policies & Regulations :
There are a lot of promising policy changes and reformations that are being planned and introduced by the government. The Goods and Service Tax (GST) was one such policy that has changed the face of the way the Indian logistics works. Along with this is the granting of the infra status and relaxing of the FDI policies that will also play a major role in 2020 that will give a huge boost to the Indian Logistics industry.

One of the major advantages the GST has brought in is that industrial centers can also act as distribution and aggregation hubs and that in effect has reduced the need to run several warehouses. This has considerably also brought down huge operational expenses in the storage department. With the growth of E-commerce and many FMCG now making their products available online easier transportation directly from the manufacturing units to the warehouses, wholesale as well as retail markets have been made possible.

The Indian Logistics industry has undergone a serious transformation and is now classified as an end to end solution provider that has integrated multiple sectors. The year 2020 seems to be very promising with many key areas that are going to contribute to the substantial improvements both in operational efficiencies as well as overall growth. There is no doubt that the Indian Logistic Industry is going to be the most dominant force in the overall economic growth of the country.

Cold Chain Logistics Management

5 key potential risks involved in Cold Chain Logistics Management

Cold Chain Logistics is no different than any other logistics operation having all the perils of the normal logistics and to add on it also has its big share of dealing with all the usual adversaries that affect a normal logistics as well as many others of its own. Many important aspects have to be considered as a risk by a freight forwarding company during handling cold chain transporation.

There can be seemingly unrelated events in providing cold supply chain logistics solutions that can impact a shipment out for delivery and which in no way can be handled by the logistics team. This is more when it comes to temperature-controlled logistics and that is the inherent volatility of a supply chain. Some of the many things that could affect changes in any shipping and logistics strategies can be socio-political unrest, wars, geological events including labor shortages.

Hence from a shipper’s perspective what one can do is to mitigate the risk and expect the worst and strategically evaluate the best options particularly while handling high value and volume shipments. As it’s imperative to say that the supply chain is a costly business in particular when you need to handle a cold chain.

The cost involved while handling cold chain is one that cannot be ignored especially when you evaluate the importance of transporting highly valuable and life-saving items. Hence means and modes have to be taken into consideration and evaluated meticulously to reduce cold chain management risk while still managing your supply chain expenses.

Let us understand the 5 things that can go wrong despite cold chain risk management.

Globally uniformity in infrastructure: Logistics is all about transporting goods from one location to the other and many a time it also crosses international borders. Though there have been scientific advances that have given us the leverage of more efficient and reliable cold chain technologies yet one cannot expect the same kind of uniform infrastructure in every country or location. Hence many times cutting edge tech can often stumble due to the lack of the simplest requirement of infrastructures.

Regulations implemented on cold chain management :
Supply chain managers must be well updated with the global scenario of events and regulations across countries. This always includes the various political and socio-economic developments that many times can force the logistics company to even change their route plans. This can have serious effects when you are handling cold chain transportation. It is not only the political and economic scenarios that can post a threat to your transportation but also the climatic and weather patterns that also can contribute to disruption in operations.

High-security risk in transportation and handling :
Imagine you have a temperature-controlled and sensitive vaccine that needs to be transported and in particular, one that has reentered a supply chain operations after been once stolen. In such cases, improper security measures can be a daunting task as it will affect the likelihood of damages that will go unnoticed. This can be a danger to human life as well.

Retailer handling in the cold chain:
Logistics is never completely free from human handling and one of the major challenges is to be sure how the retailers handle and store cold chain products when it comes to food and vaccines. Retailer’s understanding of how the products need to be handled and the way it has to be stored is a major threat to the quality of such products as this if not properly done can be harmful to the end consumers.

Distribution and delivery risk:
There are two aspects in a distribution process which is one that of transporting of goods and the second being how you store the products while in transit and at the end destination. One can be sure about the storage aspect of the cold chain management as various warehouses are fully equipped today but the concern remains about temperature management.

The challenge in any cold chain management is to deal with the various risks involved with strategic planning and dealing with unforeseen events that can disrupt your operations. There is no scope for errors in this line of operations as many times you will require to transport goods such as life-saving vaccines and medicines. Hence a proper real-time monitoring system is quite essential to keep track of your temperature-controlled shipments from transit till it reaches the warehouse.

Phamaceutical Transportation

Special key points to know while shipping Pharma products

Pharmaceuticals globally is a big business and industry as according to the recent statistics nearly 4.5 million Americans are employed in this sector alone. It is also worth noting that the Bio-Pharmaceutical industry in the US contributes to around 1.3 trillion to the world economy every single year and it keeps growing. Hence one can imagine the demand and the scale of operations involved to supply such a large requirement globally.

Shipping pharmaceutical products is not a cakewalk as it requires special know-how because mostly they are of high sensitivity in nature and have to be delivered in a time-bound manner.

They are the most complex than any other product to be shipped and hence involves a lot of guidelines and regulations that need to be followed and adhered to. After all, it is medicines that are to be shipped which is ultimately consumed by people for their medical ailments.

One of the key factors that makes it such a complex operation is that the pharmaceutical products are to be kept safe and beneficial to the end-user after the transportation is carried out. This involves immaculate planning and checks where proper inspection and care has to be assured from the factory to the point of delivery about the integrity and quality of the product. Both the pharmaceutical industry as well as the shipping industry have to work under tight regulations and scrutiny while carrying out the transportation operations.

Various factors play a major role in assuring the safe and secure transportation of pharma products to the end consumers.

Maintain Pharmaceutical Temperatures: One of the key concerns while transporting pharma products is the temperature to be maintained. The desired temperature that needs to be maintained is around 55 to 77 degrees Fahrenheit for most of the shipments to maintain product stability. Hence products must be shipped in contained that are well insulated in refrigerated trucks that can maintain these temperatures even if the normal weather is hot. The cold chain also known as reefer trucks can be used as they are designed to hold such temperatures.

The packaging is very crucial: Another very important rule when shipping pharma products it the quality of packaging. Packaging has to be thoroughly inspected and has to be shipped in climate-controlled trucks and insulated containers. Many a time shippers use thermal pallets when moving such products as they can provide another layer of protection. They protect the product from temperature fluctuations, sunlight as well as humidity.

Security a major concern: This is one material where utmost importance has to be given to security arrangements as pharma cargo is always susceptible to theft. This is because of the nature of the product that is shipped and hence faces notable dangers. Cargo thefts are real threats, especially when hauling products like narcotics. A well-experienced logistics provider can foresee and manage all such treats to keep pharma products safe. All warehouses today are equipped with state of the art CCTV cameras and with higher visibility of cargo transportation via tracking one can ensure that the pharma products are securely transported to their destinations.

Proper adherence to licenses: As already mentioned there are a lot of rules and regulations while transporting pharma products hence it is important that the logistics provider who has been entitled the job has all the proper licenses. Not only that the logistics company has to be competent to handle all the tasks involved to ensure safety with the necessary types of equipment. Not only pharmaceuticals are delicate but expensive as well and hence special precautions have to be carried out while shipping.

Summary: Logistics can be about any product both domestic household items or high-value cargo. Though every shipment has to be transported securely and on time Pharmaceutical is one such product that needs to be handled with utmost diligence and care. Afterall many times these products can be life-saving.


Choosing a Third-Party Logistics Provider

What is a logistics provider?
A logistic service provider basically deals with storing and distributing products on behalf of the local firms. They basically act as an intermediate between the producers and the customers. They offer storage facilities so that the products get stored without any harm and then they deliver the product to the point of consumption with the help of express delivery services like aircraft, ocean freight etc. Some of the other traditional functions of a distributor as also offered by them like management of inventory, warehousing, tracking of order etc.

How logistics is important for your business?
Logistic is one of the most integral aspects of any business. When you have a good logistics system, it would help you in the growth of your business and would also help you to achieve your goals. Starting from raw material delivery to your production house to delivery of the fished products to your customers, the logistics service provider helps in all of them. They help you to get your product to deliver in the most cost-effective way through the cargo services.

How to choose the correct logistics service provider?
Choosing the top logistics and supply chain company can be a bit tricky. You would need to notice certain facts in order to choose the best one for yourself. Moving products with care is a complicated task and not everyone can do it properly with full accuracy.

Hence when you choose a Third Party Logistics Provider, do consider the following factors:

● Connections
The top logistics and supply chain company would have some great connections and contacts that they have established throughout the years and this indeed would help them to carry out their services efficiently.

● Scalability
You would need to see how scalable the logistics company is. You can see the companies with whom they are associated and how logistics have helped those company to grow. Reviewing the services is quite important.

● Customer Service
Do check out their customer servicing skills. How much responsive they are when someone tries to contact them. They should also have different ways to address their customers, like through social media and calls, emails and different types of communications. Being active on all the channel and responding to all the queries is a must-have feature for any logistics company.

● Safety
The primary focus for any logistics company should be the safety of the products. They would need to take special care of all the products while storing and delivering them from one place to the other.

Choosing a third-party logistics and supply chain company is a very tricky task. If you do not choose the right one, you might have to suffer losses which in turn would also affect the reputation of your company to your customers. Take time and do your research, read the reviews and go for an experienced company. It is worth to invest a bit more in order to get the services you desire.

freight forwader and customs brokers

Difference between a freight forwarder and customs broker.

Freight forwarder and Customs brokers are two entities which play an integral part in carrying out logistics operations. Logistics is a very complex industry with multiple transit destinations and ports as mostly the transportation of cargo and goods have to be transported via international waters or air spaces. Hence it is always a collaboration of people, agents, and providers that have to contribute and make it happen.

Let us begin by first defining freight forwarder and customs brokers to get a better perspective of their job descriptions.

Freight Forwarder: A freight forwarder or a forwarding agent also commonly known as NVOCC, Non-vessel operating common carrier, is a person or a company that organizes shipments or individuals or corporations to get foods from the manufacturer or producer to either a market, customer or an end destination for the purpose of distribution.

As we read through the above definition it can be understood that forwarders are experts who are well connected with the supply chain and are completely dedicated to the physical transportation of cargo. Hence freight forwarder is a wide-ranging term that can also include activities engaging various third-party entities required in the exporting process who handles or are experts in shipment moving via truck, boat, plane or even a combination of all of these.

A freight forward is also involved in consolidating and completing various documentation as well as compliances required for the export activities. Here it would be better to elaborate on the fact that we can find many freight forwarders who are also customs brokers as well but it is essential to mention here that customs brokers cannot become freight forwarders.

Customs Brokers: A customs broker is a licensed agent whose primary function is to handle the process of clearing goods through the customers for importers. They act as an intermediary between the importer and the government customs department in the country for import and can be a private individual, partnership, association or corporation.

Brokers submit all necessary information, documents and appropriate payments to the customs on behalf of their clients and charge them a fee for their services. They must have expertise in the entry procedures, admissibility requirements, classification, valuation, and the rates of duty and applicable taxes and fees for imported merchandise.

Customs brokers are very specific in their services and also learn that an exporters freight forwarder can work in tandem with the customs brokers in order to help facilitate issues with an export transaction.

As can already be understood from the definition freight forwarding or freight forwarder is a very wide-ranging term and customs brokers are more specific when it comes to service deliverance.

Some of the key services provided by a Freight Forwarder is as follows :

  • Trading Transportation
  • All cargo pickup and drop in.
  • Negotiate freight charges
  • Getting all documents readied for exports and shipments.
  • Booking of necessary warehouse facilities
  • Dealing with the required cargo insurances.
  • Providing freight collection services.

Key services offered by customs brokers :

  • Customs valuation
  • Customs clearance.
  • International trade consultations
  • Tariff classifications
  • Dealing with all automated customs clearances.
  • Freight Management
  • Import and Export purchase order management.

SUMMARY: By now it is clear the difference of both these key entities in the logistics industry and the areas where both can converge in providing their services to customers, it is always essential that a good logistics partner will reduce a lot of your operational burdens. Having a good freight forwarder and a customs broker or even a company which provide you both these services are of utmost importance and invaluable as shipping can be the most difficult and a rigorous affair when you don’t have an expert to handle it.