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As the ShipsGo team, we pursued comprehensive research about the importance of environmental sensitivity for beneficial cargo owners (BCOs) and freight forwarders in container transportation. The study was developed by collaborating with the Scientific and Technological Research Council of Turkey with the participation of university professors and students. Eighty-one countries participated in this study. 70% of all participants are from 20 countries. USA and Turkey are the leading countries in participation. 

Primarily, we aimed to clarify the container transportation buying behavior of the users in the decarbonization process. We detect insights for all participants of the container shipping industry. We wanted to share the process and the results to create awareness with this blog based on the research.

In this blog, we covered the subject of environmental sensitivity in container transportation and what it means for BCOs and freight forwarders?

What is Environmental Sensitivity?

Environmental sensitivity is a condition that perceives and processes environmental exposures. Basically, our ability to understand and then process all environmental components.

Does the Container Carrier is Being Environmentally Sensitive Matter?

According to the BCO’s (32.7% of the participants) and the freight forwarders (67.3% of the participants) from 81 countries, container carriers’ environmental sensitivity is a variable in selecting stage of most of the participants. 71.8% of all respondents, 72.9% of the forwarders, and 71.2% of BCOs agree that “Environmental Sensitivity of the Container Carrier” is the carrier selection variable. Besides, 14.3% of all respondents have no idea, whereas 13.9% do not agree.

Does the Carrier’s Environmental Sensitivity Worth Paying Extra Freights and Accepting Longer Transit Times?

Even If the carrier is environmentally sensitive, only 56,8 % of the users agree to pay more freight costs. 62,9 % of the users accept longer transit times. 

Comparing the freight forwarders and BCO’s, freight forwarders are more aware of both actions. This attitude might relate to being in the same industry (logistics and transportation) and facing the logistics environmental facts more intensely than the BCOs.

What are the Other Important Factors in Container Carrier Selection?

According to the results, for both freight forwarders and BCOs, schedule reliability is the most crucial factor for carrier selection. The second critical factor is transit time, whereas transshipment is the third. The less essential factors are service frequency and freight cost for the participants. However, surprising results appeared when we combined these factors:

• A higher freight cost is acceptable if there is a shorter transit time.
• A higher freight cost is acceptable if there is schedule reliability.
• A longer transit time is acceptable if there is a higher service frequency.

While we are ending this blog, we conclude that users tend to use an integrated approach in the container carrier selection process. Container carriers should be environmentally friendly. They need to be reliable for their schedule, and have shorter transit times. Together, these three characteristics can be called a “perfect set” in the container carrier selection process.

Click to review Environmental Sensitivity PDF

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An exporter (cargo owners) usually operates as a producer or intermediary, which needs efficient management of both inbound and outbound logistics activities in an integrated approach. For example, the exporter engaged in production with import-based inputs should accurately forecast the transit times of inputs supplied from abroad to make production planning accordingly. With the forecasting, delays due to long transit times, especially in maritime transport, have to be known instantly. On the other hand, within the scope of finished product logistics, the cargo owner should also design a system that can deliver the container to the customer at the promised time. For many cargo owners, it is a significant problem for both early and late arrivals of the containers at the customers’ port.

Is the Current Status of Container Important for Cargo Owners?

Shipping Lines’ schedules are not reliable. According to SeaIntelligence, on-time arrivals ranged from 65% to 76% in the first nine months of 2018.  On the other hand, almost no container carrier gives any delay/update in the container transport process. Carriers, also don’t have any service informing the customer’s container has been withdrawn from the container port. Exporters have to follow up the “tracking&tracing” pages of the carriers with different designs. As a result, apart from a significant amount of time spent in this business, significant material losses and problems in customer service are experienced.

Solutions

So what do you need to do? The answer is simple;

1) The carrier with the most reliable transit time declaration should be selected,

2) A system that can receive instant information from all delays/updates during container transportation should be used.

Now, Let’s explain how ShipsGo provides these solutions briefly;

1) The carrier with the most reliable transit time declaration should be selected

Knowing the past performances is the best way to decide on the carrier that makes a reliable transit time declaration. It is straightforward to do so. Take, for example, an exporter who imports from Germany and loads his container from the Port of Bremerhaven. This exporter should bring the container to Izmir Aliaga Port with a maximum transit time of 18 days so that production plans are not interrupted. In this sense, this exporter can make a query using the find route finder” search engine of the ShipsGo platform, and the transit times of all carriers are listed on the same page.

The time shown in the list next to the carrier name is the estimated time that the ShipsGo algorithm offers the user. If the “Last Updated” information is clicked, the transit times of the last shipments made by the carrier are listed up to 5 observations. The users can easily understand the carrier’s transit time deviations and reliability.

2) Use a system that will be informed instantly of all delays during container transportation

As an exporter, you can say, “my team is currently tracking containers by looking at carriers’ websites, and I don’t need such a service.” However, the feedback ShipsGo receives from exporter customers is that the time spent on container tracking is reduced by at least 50% in the business after using ShipsGo services.

As ShipsGo, the essential services we provide to exporters within the scope of “full traceability” are as follows;

Customized tracking service

Real-time shipment monitoring

On-time arrival, delay notification, release alert, gate-out confirmation

API integration with all IT systems

Click here to explore

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Due to the fact that some ports receive a lot of traffic and are important transit points in maritime transport, the duration of the ship’s stay in the port is limited. In some cases, these times are disrupted and unexpected shipment delays occur.

About the Shipment Delays

“Back in the 1990s when carriers had the on-time performance at the 90-plus percent levels, we could carry smaller amounts of inventory,” a Hong Kong-based logistics manager for a global sporting brand told Journal of Commerce Magazine in late October 2018. “Right now, we must hold up to 28 days stock. Another shipper told JOC; “The information chain is carrier-freight forwarder-us, so it takes time,” he said. “We prefer to have it much more quickly, but we buffer stock for unexpected delays. When it happens, we check if we have enough buffer, if customers will accept the delay, or if we should deploy airfreight.”

What is the Solution to Unexpected Shipment Delays?

Use the “ShipsGo Service Finder” tool; Check the ShipsGo’s estimated transit time and the last three performances of your carrier. Also, check the transit time suggestions of ShipsGo from/to nearby alternative ports. As soon as you start your container tracking with ShipsGo, you always receive the delays/updates notifications just on time.

Port to the port transit time from Rotterdam to Port Said.

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