As an ocean freight forwarder, you face a unique set of hurdles in your business. From coordinating with multiple suppliers and customers to ensuring that all of your documentation is in order, you have a lot on your plate to monitor and control. If any one of these elements falls through the cracks, it can severely impact your bottom line.
Luckily, Electronic Data Interchange can help streamline many of the processes involved in running an ocean freight business. By automating the exchange of information between you and your trading partners, EDI can help to reduce errors, save time and improve efficiency.
Today's post highlights some of the most pressing challenges for maritime freight forwarders and how EDI solutions can provide some much-needed relief.
Top Challenges for Ocean Freight Forwarders in 2022
Ocean freight has always been a complex process, made so by the involvement of many different stakeholders and the high cost, which leaves little room for error. However, recent disruptions have made things significantly more difficult for maritime logistics operators.
Since early 2020, shippers have experienced severe capacity crunch scenarios stemming from port congestion, container shortages, and skyrocketing freight charges, among other unprecedented issues.
Now, as the Russia-Ukraine conflict escalates and pandemic-induced lockdowns recur in China, experts agree that ocean transportation will be even more unreliable and expensive in the months to come.
Below are six pressing challenges impacting marine operations today.
- High costs: As rates continue to surge, many shippers struggle to budget for their maritime logistics needs. While some forwarders have been able to take advantage of the market conditions by implementing surcharges, others have had to eat into their margins or increase prices for their services.
- Container shortages: The pandemic and geopolitical issues have exacerbated an already-existing shortage of container shipping capacity, resulting in widespread vessel delays and port congestion in key hubs worldwide.
- Poor visibility: The current unpredictability surrounding vessel schedules and estimated arrival times has made it nearly impossible for forwarders to provide their clients with accurate shipment updates. As a result, service providers find it hard to manage customer expectations and effectively plan for inventory needs.
- Disrupted supply: Recent events have forced many companies to overhaul entire supply chains in search of alternative material sources. Consequently, some forwarders have been left with no option but to endure the time-consuming and resource-intensive process of finding new partners and establishing operations for new routes.
- Compliance concerns: The ever-changing landscape of maritime regulations can be difficult to keep up with, and failure to comply can lead to hefty penalties. With new sanctions imposed and trade tensions rising, forwarders must be extra vigilant to ensure their shipments and operations align with the latest rules and regulations.
- Limited choice: The current market conditions have left forwarders with little bargaining power when it comes to service providers. With rates soaring and capacity constraints, many logistics operators have been forced to work with carriers they would not ordinarily choose.
Key Business Benefits of EDI for Ocean Freight Forwarders
The maritime transport ecosystem is braving severe shakeups. Now more than ever, freight businesses must prioritize optimizing communications and staying connected to their trading partners. With situations changing by the minute, even a minute communication delay can drastically reduce the chances of a shipment reaching its destination on time and at no additional cost.
Electronic Data Interchange is a valuable tool for maritime logistics service providers hoping to survive and thrive amid disruption. An electronic B2B document exchange protocol, EDI enables the computer systems of different business partners to communicate without human intervention. With EDI, freight forwarders can share relevant information with their partners in real-time and eliminate time-consuming and error-prone manual communication.
Here are six ways EDI automation can help overcome ocean freight challenges.
- Cost reduction: By automating B2B communications, EDI can help save staff working hours, minimize costly documentation errors, reduce email and phone expenses, and cut down on paper filing and mailing costs, resulting in substantial savings that can offset rising freight rates.
- Improved partner collaboration: EDI-enabled real-time information sharing makes it easier for businesses to coordinate with their partners and make informed decisions, leading to improved efficiency and proactive risk management.
- Enhanced visibility: Using EDI to handle all B2B interactions enables freight forwarders to create a single source of truth for shipment information. As a result, they can track and trace cargo more effectively and react faster to unforeseen issues like container shortages and port congestion.
- Accurate status updates: EDI-based advanced shipping notices keep all relevant parties updated on the latest shipment information in real-time, improving customer service and reducing the need for manual status update inquiries.
- Faster partner onboarding: EDI platforms that support artificial intelligence, machine learning, and pre-built templates enable freight forwarders to accelerate the onboarding of partner data feeds. That way, they can start benefiting from new relationships sooner rather than later and cushion themselves from the blow of losing long-standing partners.
- Streamlined compliance: Automating B2B communications with EDI can help freight forwarders meet maritime compliance standards like the International Maritime Organization's Safety of Life at Sea (SOLAS) convention requirements. By complying with regulations, businesses can avoid costly penalties and disruptions to their operations.
Remedi Can Help You Address Ocean Freight Challenges with EDI
The current operating environment has placed maritime transport operators under immense pressure to reduce costs while ensuring the timely delivery of shipments. So, if you are a freight forwarder yet to deploy EDI to manage your interactions with trading partners, now is the time to take action.
As the market leader in EDI services, Remedi can help you implement an EDI solution tailored to your specific needs and business processes. Remedi offers a vast range of flexible and adaptable EDI solutions from top providers like Cleo, IBM, and Microsoft designed to streamline communications and improve information sharing across your supply chain.
Moreover, Remedi's integration framework for IBM B2B Integrator provides a host of pre-built libraries and tools that enhance flexibility, scalability, and reusability.
Visit our logistics solutions page to find out more about EDI's critical role in maritime transport operations and how we can help you utilize EDI to streamline your B2B communications and improve your bottom line.