Africa-Press – Mauritius. The mass delays and disruption of the COVID-19 pandemic pushed the global supply chain out of the shadows and into the spotlight. Consumers, previously used to receiving goods from around the world in a matter of days, were forced to acknowledge the complex journeys these items must make on their way, involving multiple steps and international partners. Businesses struggling to meet customer expectations found building up their supply chain resilience an urgent need.
Faced with a similarly fraught geopolitical situation impacting international trade today, Modern Diplomacy had the privilege of interviewing Carmit Glik, an industry veteran with over two decades of experience in the international shipping arena and current CEO of digital freight forwarding company Ship4wd. She explains the ongoing “perfect storm” of disruption and how businesses, especially SMEs, can best adapt to and overcome it. After all, as she illustrates, the key to supply chain success is to be prepared for every “what if”.
Customers today are accustomed to modern luxuries like same-day delivery and free shipping, and have built up that expectation from brands they consider purchasing from. How important is it for businesses to really be “on top” of their shipping strategies?
It couldn’t be more important. When we buy things online day-to-day, we’re used to transparency about both pricing and the delivery timeline, and we expect to be notified if there are any issues or changes. As you noted, there is a growing expectation of next-day or same-day delivery, which we’ve all gotten accustomed to. If ecommerce businesses don’t offer cheap or timely shipping – or worse, if they do offer them but then provide a subpar service – they risk angering and losing customers fast.
That being said, there is a significant gap between what we experience as modern consumers, and global trade in the B2B space. Businesses expecting cargo – usually either their assembled products or the soon-to-be assembled raw materials – often have very little insight into when it will arrive and what it experiences over its voyage. Companies are used to finding out very late about cancellations or any other changes in the shipping process. These liabilities can make or break a business, because delays in receiving goods mean delays in getting them to customers. For these reasons, it’s crucial to build shipping strategies around real-time information and to be ready to adapt them as needed.
The same goes for sustainability, especially among younger purchasers. How important is it for retailers to prove sustainability in their shipping processes? What are some key ways in which they can do this?
I would say that retailers needing to demonstrate sustainable processes really depends on certain factors, such as the company’s size and the product’s nature, especially when it comes to SMEs (small and midsize enterprises). Corporations and very large companies are expected to sign pledges about sustainability and stick to them; for SMEs, however, there is less of an expectation that they will prioritize the environment, and it tends to depend a lot on the nature of their product. If their product has something to do with sustainability, it’s more likely that they will feel strongly about it and build it into their business strategy, but if not, it will probably be less of a priority.
In general, there is certainly a strong focus on sustainability in today’s world, and I expect that to only increase with time. It would be ideal for all businesses to implement zero-footprint production by manufacturing everything in one location, but this is almost impossible to do. However, if businesses want to make their supply chains more sustainable and share their commitment to sustainability with their customers, there are various other ways they can achieve that, such as by leveraging technological solutions that help with sustainable practices. And of course, they can always ship their goods via ocean instead of relying on air freight or trucking, since it is by far the most sustainable way of moving cargo around the world.
From your position of expertise and vast experience in the global shipping arena, what can you tell us about the current geopolitical situation and its impact on the supply chain? What are the consequences for businesses with international customers?
The current geopolitical situation is probably the most critical factor when it comes to logistics and the global supply chain – which pains me somewhat to say. When you have wars and the kinds of political crises that we see in today’s world, longer-term values like sustainability are relegated to second, third, and fourth place behind the need to react quickly to whatever circumstantial issues are preventing the normal movement of cargo.
Right now, we’re dealing with a complex geopolitical situation that is affecting shipping via the Red Sea due to ongoing security concerns and the fears of vessel operators traveling through the region. This has deterred cargo ships from passing through Port Said and the Suez Canal, greatly inhibiting the flow of goods from Asia to Europe.
In terms of consequences, the blockage has tripled the rates of freight movement from Asia to Europe, and more than tripled the journey time, as shipping companies are forced to reroute around Africa. In today’s consumer environment, dealing with this upheaval is a top priority because of its drastic impact on the movement of goods, and these fears are only being compounded by the fact that we have such little certainty as to what will happen next or when the situation will be resolved.
On the other side of the world, the prolonged drought that hit the Panama Canal over the past year has reduced water levels drastically, requiring ships to cut their weight capacity in order to cross. If we look at the world map and the usual flow of trade, the two access points allowing manufactured goods to move from Asia to the West are the Panama and Suez Canals. The current disruption in these two gateways, triggered by political conflict and climate change, has created a “perfect storm” for global trade. The impact on businesses, especially SMEs, cannot be overstated.
How is digitization changing the international commerce and retail sectors, and why is digital freight forwarding so important?
Digitization is important precisely because of the kinds of disruption I just described. Every business owner needs their supply chain to be as lean and adaptable as possible, so that if there are issues in a certain region and they need to move parts of their business operations, they’ll be able to do so with the support of trusted partners. Working with a global digital freight forwarder is what grants business owners this flexibility: they can help predict when things will go wrong and advise on the course of action to minimize the consequences.
This is especially important because about 90% of the time, things will indeed go wrong. The question is not if, but when. And the next question becomes: can I access the materials I need from anywhere? Do I have a partner in global logistics that can provide me with solutions other than my normal route?
What SMEs need to understand is that they can no longer build their logistics strategies on just their current needs. With so much volatility in the world, it’s not certain that you’ll be able to meet your needs tomorrow by doing the same thing you did today. For these reasons, it’s important to seek out partners that can give you global coverage and immediate access to information, services, and assets.
Tell us about Ship4wd – what service does it provide to whom, and what is its mission?
Ship4wd was built for SMEs, to create a safe space in global shipping for small and midsize enterprises that we realized nobody else was delivering. It was established with supply chain disruptions in mind, because when there are blockages or crises – from COVID-19 to the geopolitical obstacles we’ve been discussing – it’s the smaller businesses that suffer from a lack of access to assets. When there’s an increase in demand and not enough capacity to go around, most of the assets will go to large corporations who can afford to pay 10-12x more for their freight.
In addition to promising guaranteed shipments to any SME customer, regardless of cargo quantity, we also provide them with customs clearance services, cargo insurance, financial coverage, and digital management of the entire end-to-end process in one platform. It doesn’t matter if you’re a microbusiness or a larger medium enterprise – Ship4wd gives you everything you need in one place to move your cargo, with the full 24/7 guidance of a human support team.
At Ship4wd, we understand that for businesses handling a physical product that needs to get from one place to another, any holdup is comparable to oxygen being cut. Our role is to provide that much-needed oxygen from anywhere, to benefit your business.
What shipping advice would you give to SMEs today?
We’re living in truly unprecedented times. Last year, shipping rates went down significantly and it looked like things were finally headed back towards normality after the pandemic, but then we were suddenly hit with the Panama Canal drought and the Red Sea blockage. I’ve been in this industry for 25 years, so I can say this: unfortunately, it’s really never smooth sailing (no pun intended!).
That said, the most important advice I’d give to SMEs is to really embrace this mindset when building a business, and to expect volatility and disruption as the norm. As a business owner, it’s imperative to have a contingency plan, as well as partners that not only provide you with what you need today, but also with what you might need for any potential “what if” scenario. It’s this mindset that I often find to be lacking, and precisely what I’d recommend to any SME looking to send and receive products overseas.
BY
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