Who would have thought CoronaVirus would spread beyond mainland China? And how about its impact spread? Holy moly, the least said, the better. While some industries have started to get back on their feet, Covid-19 poses disruptive challenges to freight transport across air, ocean, road, and rail sectors.
The intermodal freight transports are scrambling to get back on track and are forced to retreat into survival mode. As intermodal transport service uses two or more modes of transportation to deliver goods— disruption in any mode makes it even tougher to sync and manage the supply chain.
Let’s check the impact of Corona and its latest trend in intermodal services:
Ocean freight transport trends in 2020
CoronaVirus is playing dicey in ocean freight transport trends. While it has slashed demands in some areas, other regions need it more than ever. In any case, one thing is common— there’s a shortage of labor in ports, and that has imbalanced everything, including loading, unloading, and container availability.
There has been an increase in the percentage of blank sailing. The ships are not sailing and skipping the entire journey to keep the demand for freight capacity and managing the plummeting rates.
Sustainable shipping charges have hit the second blow. As ocean shipping emits 13% of the human sulphur in the water, to comply with IMO 2020 regulations; shippers are adding environmental surcharges on deliveries.
Measure 1: Carriers have generally increased the rates and are applying fees to recover the losses. Some carriers are charging in the names of peak season surcharges or empty shell surcharges for container imbalance.
Measure 2: Some intermodal ocean carriers are deliberately reducing the speed of the cargo to cut down fuel costing and compensate on their losses. Slow steaming has made delivery dates a bit unpredictable. The commercial brands are feeling the heat of slow steaming too!
Measure 3: Ships and carriers are not immune to viruses. Ocean freights always try to reduce cost and increase reliability by adding digital technologies. The explosion of the virus has compelled businesses to use technology to minimize human contact and automate transition to help the cash register ringing.
Road freight transport trends in 2020
Road freight transport is no different than waterway transport when it comes to a shortage of labor and driver supply. It is also looking out for contact-reducing transportation models to minimize the risk of the virus spread.
As trucking plays the major choke point for the delivery of essential supplies like medicines and food; any disruption would mean difficulty in delivery of the everyday essentials. To keep up with the health of the supply chain, intermodal transportation companies are also adopting new measures to recoup their costs.
Measure 1: Though truckers are facing rocky roads to recover, as cargo volumes have reduced to 50% in the USA alone, major intermodal transportation companies are planning to move to platoon concept. While we still don’t have true tucking automation to cover up the driver shortage, automated platooning and support systems can be a massive stride in the industry.
Measure 2: One thing is sure. The pandemic has taught intermodal road transports that diversification in the supply chain is the key. Small businesses with limited shipping options are getting blown away in the mighty spurt of Corona. The realized ones are busy diversifying their supply chain.
The good and the bad news in the trucking freight industry: April and May saw a bleak condition, while June and July observed a definite resurgence in the trucking industry. Trucking employment rate also increased. But the bad news is COVID-19 related volatility. As the virus infection rate surges, the supply chain again goes unpredictable and volatile.
Air freight transport trends in 2020
More than half of the world’s air freights are on hold. But high water-carrier rates and delays caused by slow steaming is pushing shippers to look for more convenient means in the form of air cargo.
Part of the reason why the freight charges of Air cargo has gone up in the past month. After a consistent decline in May, the prices have fared out four times in four consecutive weeks. Having said that, the global airline industry is on a colossal downhill— close to 20% from the past year.
To compensate for the record capacity decline, airline freight is doing everything in its might to recover losses.
Measure 1: The challenges posed by Corona pushes the air freights to a record level. They’ve added emergency support surcharges that hit the pockets of commercial shippers who’re already battling to survive in the market.
Measure 2: The hike in demand forces airways to add more freighter flights, especially for the longer routes when passenger flights seem dead. To level-up the losses, they’re postponing maintenance and pulling out the old equipment. The industry is using passenger airlines to fulfil the demands of cargo-only services.
Rail freight transport trends in 2020
The continued hike in the ocean and air freight is driving shippers to opt for rail freight transport. The current difficulties and trends in other modes make it harder to ignore or resist rail freight transports. Businesses are switching more to intermodal containerized services as rails get more traction for importing and exporting to longer routes to South-east Asia and Oceania.
That said, shippers are exploiting rail capacity and frequency to avoid the undesirable and alarming trends such as blank sailing, inadequate transport, and cancelled airways.
The effect of CoronaVirus: The pandemic has globally made the rail freight the first choice of delivery as there’s no predictably around goods carriage. Commercial brands have siphoned their trusts to this means of transport for reaching their consumer on time.
So far now, it seems to be doing good, and it’ll be fascinating to see how the rail freight transport behaves when the ocean and air freight return to normal.
The conclusive argument
Intermodal services are hard to get along as there are plenty of canyons and peaks ahead due to the unpredictable nature of the virus; however, Target Transport is expecting things to get better as the year passes by.