The air freight industry has experienced some radical shifts throughout the years, and 2018 will be no exception. Headwinds are in store for international air freight transporters as they manage available air capacity, especially during peaking season. Capacity is likely to become harder to find. If large shippers acquire a larger slice of the available capacity, small and medium-sized shippers will find it more problematic to secure air space for their freight. Peak season will also add more pressure on available capacity. At certain times of the year, there is more freight flowing than capacity putting even more pressure on supply chains.
The International Air Transport Association (IATA) confirmed full-year 2017 data for global air cargo markets reporting that demand grew by 9.0%, which was double the annual growth recorded in 2016. This outperformed the industry-wide growth in both cargo capacity and in passenger demand. There were improvements in load factors, yields and revenues. Air cargo is still a very hard-hitting and competitive business, but the developments seen in 2017 far exceeded expectations.
Regional Performance Airlines in all regions reported an increase in demand in 2017:
Asia-Pacific carriers saw demand in freight volumes grow 5.6% in December 2017 compared to the same period in 2016 and capacity grow by 2.2%.
North American airlines saw freight demand increase by 5.4% in December 2017 year-on-year and capacity increase of 2.2%.
European airlines posted a 5.0% year-on-year increase in freight demand in December and a capacity rise of 3.2%.
Middle Eastern carriers’ freight volumes increased 6.3% year-on-year in December and capacity increased 4.7%.
Latin American airlines experienced a growth in demand of 4.9% in December and a capacity increase of 11.6%.
African carriers’ posted the fastest growth in year-on-year freight volumes, up 15.6% in December 2017 and a capacity increase of 7.9%.
Total air freight traffic market shares by region in terms of freight ton kilometers (FTKs) were: Asia-Pacific 37%, Europe 24.2%, North America 20.5%, Middle East 13.7%, Latin America 2.7%, Africa 1.9%.
Over the last few years, the evolution of digitization within the air industry has steadily increased. As in most businesses, big data obtained in real time, from real events, combined with flexible management, is better serving air carriers to take a more competent approach to traffic preparation and infrastructure.
Top 5 air freight logistics tech trends for 2018 It’s March of 2018 and the e-commerce-driven demand for airfreight show few signs of reduction. While the overall position for the year is generally positive, there are still various holdups in the supply chain that need to be addressed, including amplified safety and transparency, enhanced product quality and quicker processing of cross-border deliveries. Fortunately, there are numerous technology firms willing to help forwarders, carrier and shippers resolve these issues and strengthen the overall efficiency of air cargo transport.
According to Air Cargo World, here are the top 5 tech trends to look out for in 2018:
Flexible warehousing. Today’s warehouses have been altered into dynamic avenues of logistics activity. It’s no longer about just one big building, but a network of large and small facilities tactically placed to serve the changing needs of customers. The warehouses of tomorrow are more and more dependent upon robotic vehicles and are intended to be customizable to meet today’s on-demand desires, serving as both retail channels and e-commerce distribution centers.
Interest in blockchain technology. Blockchain is the air freight catchword that refuses to go away – primarily because there is so much potential for it to drive and secure the mechanics of the supply chain. By creating a shared, automated record of all the dealings that occur in a network, blockchain technology allows trusted parties limited admission to data in real time. The companies that hope to present the technology as a way of digitizing global cross-border trade say it’s one of the best methods to reach transparency without compromising security or privacy.
The Internet of things. The IoT is still acquiring enough traction in the logistics field that we may begin to see some extensive implementation this year, using fixed technology such as radio-frequency identification (RFID) and GPS tracking systems. Since air freight involves the movement of so many concrete items – from ULDs to trucks to 777s – it is complementary to IoT technology.
Unmanned Arial Vehicles (UAVs). Small drones designed to deliver minor, high-value merchandise, such as pharmaceuticals to remote hospitals, have been around for years. All of them are hindered by the same restrictions from most world regulatory agencies that ban their use beyond line-of-sight piloting and above a few hundred feet, out of concern for public safety. This is a major issue, and finding a sensible accommodation will be crucial to development. The types of drone aircraft being conversed this year are not the same as the little quad- or hex-copters favored by hobbyists. For 2018 the discussion will shift to much larger machines, capable of carrying larger payload several kilometers away.
Artificial Intelligence. There is great potential for Artificial intelligence (A.I.), which integrates the collected “big data” from the supply chain and uses machine learning to recognize unseen patterns of daily e-commerce. With the overwhelming capabilities of the newest data-driven analytical software, shippers and forwarders may soon be able to predict bottlenecks like weather events, traffic slowdowns and other unforeseen variables that can hinders the supply chain. A.I. can also be used for anticipating not just possible problems, but future buying patterns, so shippers can better evaluate when certain goods will be most prevalent and can respond rapidly to move these commodities to distribution center closer to their clients.
Looking Ahead Understanding the trends and opportunities will be the key to maintaining stability in 2018. Start by evaluating your current transit times and deliver dates, and assessing how they influence your ability to implement an effective air freight strategy. Many businesses discover that broadening transit times alone can often save between 15% and 20%.
You can also choose to do business with a large, stable freight forwarder, who can help you navigate the challenges of finding space availability, especially during peak shipping season. Let Logistics Plus be your trusted partner in navigating the ever changing and increasingly complex air freight and cargo environment!
Amazon has introduced a new program called Supply Chain Connect for merchants using Fulfillment By Amazon (FBA) services. This new program is designed to enhance seller-supplier efficiencies and increase control of inbound shipping to Amazon fulfillment centers (FCs). Logistics Plus, being an approved third-party Amazon solutions provider, is a full participant in this new program.
Sellers currently have two methods to deliver inventory from suppliers to Amazon FCs. One is to have the merchandise delivered to their own facilities and then prepare and ship the items to Amazon FCs themselves. Another is to have a third-party supplier ship the merchandise directly to Amazon FCs on their behalf, in which case the seller would have to coordinate between the supplier and Amazon. With Amazon Supply Chain Connect, FBA sellers can choose to have their third-party suppliers (such as Logistics Plus) send items to Amazon FCs using the same Seller Central portal they already use for all of their Amazon-related shipments.
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Program Advantages
New Supplier Portal: A central supplier gateway where designated suppliers can develop your FBA shipments.
Reduced Lead Time: Suppliers can enter box content information and instantly download FBA shipment and item labels removing the need for back and forth communication, following a decrease in lead time.
Streamlined Process: Suppliers have the resources needed to carry out shipments with greater precision and become more mindful of the Amazon shipping processes.
Fulfillment Flexibility: By having streamlined communications with suppliers regarding your Amazon shipments, eCommerce merchants can continue to use third-party logistics companies to support all of their omni-channel fulfillment needs.
When a merchant chooses an Amazon Partnered Carrier, the results are lower costs and greater visibility for Amazon. Throughout the months leading up to Christmas, FBA sellers often describe complications of shipments to Amazon FCs that end up in limbo. Supply Chain Connect could likely clear up these issues for sellers, enhancing the fulfillment process. Here are two scenarios in which sellers can use the Supply Chain Connect program in conjunction with Logistics Plus Fulfillment Solutions and their Amazon Seller Central accounts:
Process for Merchants that utilize Seller Central and Logistics Plus manages the process
The client emails to let us know what they want sent into Amazon.
We log into their Seller Central account, create the shipment, confirm the PO and print all necessary ASIN labels.
We prepare the shipment and enter the details back into Seller Central.
We then print the shipping labels/BOL and complete the PO.
Process for Merchants that handle their own Seller Central account:
Client will set up the shipment in Seller Central themselves and then email the details to us, including the template for the labels.
We prepare the shipment, label, pack and send the details back to the client via email.
When the shipping labels/BOL are available they are sent back to us via email.
The fulfillment experts at Logistics Plus stay up to date on Amazon guidelines and information so that our clients don’t have to. We guarantee that our work is up to their requirements. We can do simple shipments, or we can handle very detailed assembly work prior to shipping. Let us know if we can help you address your Amazon or eCommerce fulfillment challenges.
Over the span of 10 years, the ocean freight transportation industry has been challenged by global supply and demand disparity throughout the market, affecting both carriers and shippers. On occasion, there is overcapacity in the market, causing a major decline in the rates. There are also occurrences in which demand quickly increases, causing the rates to spike. Ocean carriers have benefited from these periods of increased demand, triggering rates to shoot up and become more unstable and challenging for shippers to allocate and purchase space.
One of the driving variables of this global supply and demand imbalance was Maersk’s fleet venture initiative: Maersk sought to control the worldwide container market and drive existing industry rates. They started building more vessels to achieve this goal. However, this plan was interrupted by the Great Recession of 2007-2009, when supply decreased rapidly for container shipping.
The recession instigated a chain reaction for ocean carriers, making it vital to ensure that freight rates didn’t tumble too far. In response, ocean carriers began forming new alliances and incorporating the following strategies:
Slow steaming: conserve fuel and increase transit times
Vessel idling: remove vessels from the rotation during slow periods
Organizational cost-cutting: layoffs within the company
IT modernization: large investments into technology and creating a more automated system
The Main Three
What used to be four main alliances has recently changed into three larger unions. The current state of the three-carrier alliance takes into account almost 80% of the container trade in the world and nearly 90% of container volume on primary trade lanes.
Ocean Alliance (CMA CGM, APL, COSCO, China Shipping, OOCL, Evergreen)
The Alliance (NYK Group, “K” Line, MOL, Yang Ming, Hapag-Lloyd, UASC)
The absence of competition that has been created due to these major unions has permitted carriers to recapture productivity, control rate changes, and space accessibility. As a shipper looking for other possibilities, it can be troubling that five or six worldwide carriers control all major international trade routes.
New Carrier Alliance
Three Japan-based container shipping carriers are paring up to create a new joint venture, entitled Ocean Network Express (ONE). These carriers are comprised of Kawasaki Kisen Kaisha, Ltd. (K-Line), Mitsui O.S.K. Lines, Ltd. (MOL), and Nippon Yusen Kabushiki Kaisha (NYK). The development of the joint venture is said to merge the companies’ container shipping business, including global terminal operation business. By offering high-quality, competitive services through the enhancement and alliance of the three companies’ global network and service structures, Ocean Network Express will be capable of better meeting customers’ needs. The company has also been working towards its goal of launching the new JV. Once all anti-trust reviews are finalized, the establishment of the new JV will officially be publicized. The start date for Ocean Network Express is set for April 1, 2018.
Benefits:
Provide service across 90 countries
Fleet size of 1.4 million TEU (Twenty-Foot Equivalent Units)
Represents around 7% of the global share
The Power of Carrier Alliances Advantages of the carrier alliances include:
Less competition, while at the same time greater control of vessels
Better management of ship capacity
More effective coordination of future ship orders with forecasted demand
A lowering in operating costs by more effective collaboration with service providers, such as ports, terminal operators, stevedores, tugboat providers, and container lessors
Enhanced reach, that will allow alliance partners to service new ports and maximize the potential of new routes
Concerns due to the alliances include:
Terminal congestion
Chassis dislocations: raises concerns that the shipper or importer may be bearing the brunt of that impact and paying any associated dislocation fees.
Delays in spotting and releasing intermodal trains: intermodal trains have been delayed or had other challenges due to increased congestion and ship bunching
The history of the maritime industry has traditionally been one of feast or famine. Large swings in vessel capacity and shipper demand have made for a turbulent environment in terms of financing and planning for the future. The formation of shipping alliances has helped to mitigate these issues and serve as a strong incentive to continue and strengthen them.
Logistics Plus can be your trusted partner in navigating the challenges of dealing with and arranging your logistical needs with these large organizations.
When you think of Valentine’s Day, you probably associate it with an abundance of flowers, boxed chocolates, and sappy love letters. Valentine’s Day is a holiday where millions of Americans will spend substantial sums of money on gifts to express their feelings of love, as they do every year. However, many most likely have no appreciation for the vital role that the transportation industry plays in the delivery of this special day.
Valentine’s Day is a great testament to how much consumers are willing to spend to show their love. What few people realize is that behind every bouquet of flowers and box of chocolates is an unseen and highly choreographed dance of logistics. This invisible performance can employ numerous modes of transport encompassing airlines, maritime shipping, as well as trucking, and even railroads. The successful execution of this supply chain will ensure that customers receive the gifts they desire, and the providers are rewarded for their efforts.
Achieving and delivering consistent results can be a challenging task for the Valentine’s Day deadline. Many variables enter the equation, including conditions where flowers are grown, as well as the weather on the big day. Also, careful control of temperatures during transport is critical to ensure no degradation of fragile floral cargoes. While other items purchased during Valentine’s Day may not require the demanding conditions as flowers, forecasting supply and demand for these items, like cards and candies, can affect profitability.
Though many do not consider the supply chain to be a vital component of Valentine’s Day, it’s clear how critical shipping is to this fruitful occasion:
$19.6 billion: An estimate for how much U.S. consumers will spend on Valentine’s Day according to the National Retail Federation
36 million: The number of heart-shaped boxes of chocolate sold for Valentine’s Day each year
110 million: Approximately how many roses, the majority being red, will be sold and delivered within a three-day period
$158.71: The average amount of American men spend on Valentine’s Day
$2.0 billion: The amount people will spend on flowers this Valentine’s Day
60%: The percentage of American roses produced in California
We hope you enjoyed these fun Valentine’s Day supply chain facts. Keep Logistics Plus close at heart when considering your transportation needs throughout the year. We LOVE logistics – it’s in our DNA!
What is Blockchain Technology? Blockchain is an emerging technology that allows for the decentralization of data as well as making that data unalterable. A simple way to view blockchain is as a decentralized digital ledger of transactions. It is most famously known as the accounting method for the cryptocurrency, Bitcoin; but blockchain’s potential expands well beyond the current hype of cryptocurrencies.
The main characteristics of blockchain include being 1) decentralized, 2) verifiable, and 3) unalterable. These characteristics are viewed as having many advantages within the logistics industry. Transparency and trust between parties can be achieved by providing the same verified data to all members on the network. Blockchain technology has the promise of decreasing costs as middlemen are eliminated and antiquated systems are replaced with systems of higher efficiency.
Change in Logistics Blockchain technology has the potential to greatly benefit supply chain management. Examples include:
Improved traceability and trackability
Elimination of middlemen, which cuts costs, reduces paperwork, and shortens the supply chain
Reduction in the cost of regulations and compliance
Increased transparency of price, ownership, and the entire process
Accelerated payment, better security, and reduction of fraud
Simplified claims settlement
Another major advantage will be connectivity through IoT (the internet of things) where physical means of measurement, control and tracking can supply data and information. Blockchain technology will make sure this information is verified, distributed, and hacker-free. Major companies, such as UPS and Walmart, are starting to realize these advantages, and new organizations to implement uniform standards have started to develop. One of the most important is BiTA, the Blockchain in Transport Alliance. It is composed of companies ranging from truckers, freight consolidators, logistics firms (including Logistics Plus) as well as software and information technology firms. Recently, BiTA announced that it would use open standards to encourage adoption and usage.
In preparing for blockchain, BiTA cites the following many use cases:
Performance History – Performance history through the blockchain framework can allow parties to see solid and definitive evidence of past performance in all the relevant metrics. This removes the “trust” aspect from all deals
Vehicle Maintenance – Blockchain allows for the item by item records of vehicle repairs. Instead of one person holding an extensive repair history, it is held within the blockchain. The history can now effectively move with the equipment for anyone to see.
Quality Assurance – Thanks to the distributed nature of blockchain, everyone involved in the transaction has access to all points. Taking photos and evaluating freight at pick-up and delivery locations reduce the likelihood of unsubstantiated disputes.
Compliance – Blockchain and ELDs are a natural pair. ELDs can send a near endless stream of data to the blockchain in real-time. Pairing this information with traffic data, weather data, etc. allows for up to the minute rerouting.
Capacity Monitoring – In trucking, available capacity can change throughout the day. The blockchain can provide the necessary transparency to know when and where capacity opens up, allowing participants to take advantage of shifts in demand.
Payments and Pricing – Payment processing and settlement is all secure on the blockchain, and transaction information is easily accessible. By keeping detailed historic payment records, people can use more data than ever to determine rates.
Fraud Detection – Every transaction that takes place on the blockchain is visible to everyone on the network, and nothing can be removed. This transparency removes many points where fraud occurs and eliminates double brokering.
Theft Prevention – The blockchain can contain detailed information and rules. These can even include ID pictures and rules for the pick-up and delivery of the freight, increasing security and reducing the possibility of theft.
Blockchain isn’t just an industry disruptor, it’s the technology that will revolutionize the way people do business. As blockchain and IoT converge, the result will be that the transportation and logistics industry may never be the same.
When you think of 
What is Blockchain Technology?