- December 14, 2021
- Posted by: svm
- Category: Innovation
In recent months, several large retailers have taken on the role of becoming their own shipping lines. This is in response to the pressing need to meet increasing shopper demand with the threat of empty shelves looming.
This decision for retailers to own their own ships comes on the back of a series of global equipment shortages, space shortages, port congestions and delays, and a considerable rise in freight rate, all due to supply chain disruptions brought on by the pandemic.
While chartering their own vessels seems to have resolved many of their challenges, particularly around cost and control, the first blush of the endeavor might be starting to wear off.
Retailers who have their own vessels and containers find they still face overarching shipping issues, such as port delays, fuel consumption costs, port scheduling, crane costs, and more, much like all other liner organizations. Ongoing port congestion, equipment shortages and imbalance, labor shortages, and more, continue to drive the need for a smarter use of resources for Liner Shipping.
The question around whether or not retailers should continue in this vein, or return to their core business and leave shipping to the professionals, is what the shipping community is asking itself.
Strategy #1: Short Term Shipping
Assuming the current challenges abate in a few months, and the supply chain returns to normal, viewing this as a short term solution might be feasible.
What if the freight rates drop to pre-2020 levels?
What then of the capital outlay for this short term strategy?
Setting up a shipping liner company requires considerable expenses, resources, niched skills, and massive capital investments. Not to mention the new and daunting world of maritime-related legalities, strict international regulations, and operational procedures that will need to be learned and adhered to.
With all of this in mind, a short term strategy seems implausible, considering the heavy investment in time, infrastructure, capital, and resources.
That is, unless they are able to find a shipping partner who has the expertise, the experience, and the technology that can be set at their disposal.
Get Up and Running Quickly, with Solverminds
The team at Solverminds – a trusted technology solutions provider for the shipping industry – is the perfect partner for organizations that want to run their own Liner Shipping, but do not want to be encumbered with the delays, admin, and heavy investments typically associated with it.
The team of experts at Solverminds bring their years of experience and tremendous maritime IP, backed by their leading cloud-based Liner ERP solutions to those wishing to start a Liner Shipping without the burden of a long term commitment.
It means clients are up and sprinting in a short period of time, at a fraction of the cost, and with very little risk.
The complementing partnership between non-maritime organizations and Solverminds also means clients can respond quickly to changes in the economy as well as shifts in the shipping environment with agility.
Additionally, this partnership with a leading maritime technology provider allows organizations to exit the shipping game with grace and minimal disruption, should the supply chain recover sufficiently. It also gives them the option to shift their short term strategy into a more long term endeavor, should the need for a more permanent solution be required.
Strategy #2: Long Term Commitment
If the challenges that have plagued the shipping industry in 2020 and 2021 show no signs of abating in 2022, many retailers who have opted to own or charter their own vessels may opt to settle in and embrace this as part of their day-to-day operations. In short, creating a fully-fledged logistics / shipping division which will complement their supply chain. There are some examples here where certain retailers have been actively involved in chartering ships and have embedded shipping as part of the supply chain logistics, and therefore these retailers experienced minimal impact from the global logistics issues.
In order to do this, they will need to get to grips very quickly with running two, intrinsically different operations – one being retail, and the other shipping – each with their own unique skill requirements, parameters, technology and infrastructural needs, and challenges.
Solverminds is Invested in Lasting Partnerships
Deeply entrenched in the maritime industry, with decades of experience solving many of the larger fleet and liner operations’ challenges through technology, Solverminds has a long history of successful partnerships.
Offering powerful AI-powered technology specific to the maritime industry, their solutions range from ERP that solves the day-to-day liner operations and equipment logistics associated with liner shipping, to the more complex and innovative, such as providing the world’s first stowage optimization platform.
Finally, retailers may consider a mixed strategy of owning ships as well as buying slots on cargo carriers. This might be the more risk-mitigating option, and could be the more reasonable approach going forward.
Ask Solverminds About Next Steps
Retailers who have become shippers in 2020 and 2021 will soon face a fork in the road where a decision will need to be made around which strategy they will adopt: continue as is, abandon ship, or make the best of both worlds.
Regardless of whether the decision is long or short term, facing the high seas with an experienced partner will ensure the ship reaches shore in the best, most economical, and most efficient manner, with minimal risk and loss.
Ask to speak to a specialist at Solverminds about your shipping strategy, and we’ll ensure you steady the ship in these uncertain times.