Fluctuating freight rates and the need for enhanced financing options to buoy cash-flow-challenged freight forwarding businesses have been identified as dominating concerns for the international supply chain industry.
A survey conducted by DP World to coincide with the inaugural Global Freight Summit in Dubai found that of all the forwarders approached, 80% had highlighted freight rates as the biggest worry keeping them awake at night.
Exacerbating their concerns about costs and what wildly fluctuating rates are doing to their bottom line and business sustainability in the long run, is the lack of financing.
According to the survey, 37% of participants said financing had a crippling effect on their ability to deliver goods.
The survey also found that, interestingly, while rising rates and lack of financing were driven to a head during the Covid years, the pandemic wasn’t all bad.
This is despite the fact that global lockdowns disrupted every aspect of industry, including logistics.
The pandemic had actually resulted in several positive benefits, DP World said in a survey statement.
“A third of freight forwarders said it prompted a much-needed overhaul of their business, with 41% saying it has changed how they track cargo.
“Over half (54%) said it has increased pressure on management to operate more sustainably.”
Speaking at the conference, Mike Bhaskaran, chief operating officer of Digital Technology at the Emirati logistics multinationals, said the uncertainties of today’s world were making trade harder and increasing the disconnect at various points across the whole supply chain.
“The freight forwarding community must come together to act now to mitigate risk so that we can build towards a more resilient future,” he added.
