The rapid boom in Air freight rates, is fueling the demand for less than container load(LCL) services.
Several leading logistics operators are commenting that largely, as a result of the Covid pandemic and its resulting shipping panic, airfreight is becoming un- economic, especially whilst stock demands continue to fluctuate. LCL provides flexibility to take only necessary space in a container rather than paying for the whole shipment.
last year for example, Maersk appointed a global head of air and LCL following the integration of Damco and the company’s ambition to become a container logistics integrator. Is this the trend for the future?
One of the biggest disadvantages of LCL has always been lack of transparency, with many different companies sharing shipments. Tracking progress between so many companies is extremely difficult if not impossible and often the headaches may outweigh the savings. Jan Philipp Harnisch, of Rhenus logistics, claims that his company provides full transparency with its LCL shipments by controlling the whole supply chain from beginning to end. The forwarder says it also has a new data driven technical solution in the pipeline, which will give customers greater knowledge when monitoring shipments. The market is changing due to the huge growth in global e-commerce, the rise of emerging markets and shifting sourcing trends and he also believes that near shoring also has the potential to give LCL a much more strategic role post pandemic . Trade wars, global uncertainty and disparagement taxation are making manufacturing harder more unpredictable and expensive. The pandemic has also made companies more aware of the need for faster localised production and shipping.
* With these factors in mind”, continues Harnisch, “when the effects of the pandemic recede, I think that LCL will continue to be used by small and medium-size companies to replenish stock and operate with more flexibility. Having the option to move quickly and easily by upgrading or downgrading shipments sizes, especially on a more local level. This will give these businesses the much-needed control they need during those times when it can feel totally out of their hands.”
Meanwhile the current empty container shortage is also pushing many shippers to enquire about LCL options.