As part of our commitment to provide you with the most up-to-date and relevant information on the logistics industry, we share our Market Update on the Latin American market.
In this edition we will show you the current state of the retail market and its promotion strategies to reduce inventory and changes of buyers’ behavior, as well as information on the bullwhip effect and some alternatives to minimize and make the logistics chain more efficient.
In addition, you will find information and interesting data on the update of the state of the ports, the most important transport routes and relevant news.
We hope you’ll find the following information helpful, as well as inspiring to boost your business and keep your cargo moving.
Topic of the month
In the logistics world it is important to know what Peak Season means, so as an importer, you can get prepared and find those key partners that can help you with an agile supply chain.
This important season for logistics is when demand for imports and exports outstrips capacity in the supply chain and this adds an extra layer of complexity to the already stressed environment of logistics. When the demand is high and the capacity is limited, cargo is held up, rolled, or delayed.
Peak season happens every year and is something that importers and exporters have to consider, normally the prime shipping time starts in August, and everything gets back on track near the end of October. This is because all the back-to-school, black Friday, cyber Monday, and holiday shopping boost the demands during those months. Of course, the season might be longer, depending on the market and its conditions, on 2022 the World Cup is at the end of the year, which means the retailers are getting ready for that season, which sums up the peak season of this year.
There is another important shorter peak season that starts in January and February when most manufacturers from China shut down their factories for a week or more to celebrate the Chinese New Year.
Having these months on schedule can help to coordinate with your logistics provider to prevent delays and respond to unanticipated hurdles, therefore you can make the logistics chain more agile.
Peak Season and Pandemic
These days with a logistics world stressed by the pandemic around the globe, peak seasons have shifted depending on the articles shipped or stored, and the different and possible bottlenecks from COVID19 variants, as we have seen lockdowns in Shanghai twisting the global supply chain, also climatic seasons are another factor that tend to affect logistics.
2022 peak season expectations are now looking towards the growing e-commerce. A study posted by Forbes explained that e-commerce will represent around 20% of global retail sales by the end of this year. These changes in the supply chain give more challenges to the logistics and preparation for importers and exporters.
In the xChange Industry Pulse Survey, more than 200 industry professionals exposed that a lot of companies have international shipments set up early in the year, but there is still a lot that will continue to rely on the spot freight market to move their cargo.
Last year during peak season, the supply chain suffered many disruptions, congestion, and high costs attached to the high demand. This 2022 a lot of importers have planned ahead by doing long-term contracts, multi-tender strategies, early inventory, alternative routes of shipment, and contracting long-term slot agreements with carriers.
Golden Week adds additional pressure on freight space
Golden Week is a national holiday in China, where all the factories close due to a week-long of festivity. The seven-day festival includes parades, ceremonies, and other displays and is held annually on October 1, celebrating the founding of the People’s Republic of China. Many importers are rushing to finish production, and send their cargo before the festivity starts, this hurry contains the freight space which is already tightened up because of the peak season. Carriers and Trucking providers will be more overbooked and with this high demand, the logistics tend to be more challenging for all the stakeholders.
Here are some tips to be prepared for Golden Week and Peak Season in this 2022:
- Plan and forecast your stock
- Find a provider that gives you visibility
- Book your shipments ahead of time
- Consider longer transit time
- Use an integrated solution that is resilient to supply chain changes
Nowadays with so many challenges in the logistics world, you must find the right partner that can help you with your supply chain needs, able to manage last-minute changes, provide visibility across all the supply chain, help you during these peaks, and respond to any disruption.
Main port status
Key ports across our global network remain stressed mainly due to strikes, shortage of labor, and weather impacts.
- In Northern Europe, the Situation in Bremerhaven remains with an experienced waiting time of 3 days due to busy line-up and yard congestions, Rotterdam has improved however still unstable on the line-up for vessels coming.
- In Asia, the situation has improved in Ningbo with experienced waiting time from 3 to 1 day.
- In Latin America the situation with weather disruption remains deteriorating in Chilean ports with often closures and operations disruptions.
The same is experienced in South America, due to weather disruption, experienced waiting time can be of 1 day in Santos, Itapoa, and Paranagua.
- In North America, West Coast the situation has not much changed with the very high experienced waiting time. Oakland remains the most critical port with experienced waiting times of up to 15 days. For the Canadian ports, Vancouver remains deteriorating, and the waiting time experienced can be up to 44 days.
ECSA: The resume of passenger planes with cargo option (PAX) provided more capacity and the low perishable season countrywide has lowered the demand and some carriers and even offering promo rates.
MAA: Own Capacity flight from Mexico ( MEX ) to ( FRA ).- With Senator integration we are able to move general & dangerous goods cargo in compliance with International Air Transportation Association regulations out of Mexico to Germany. 2 direct flights per week. Space available.
Space Limitations & Backlog out of Nicaragua and Honduras to US.- Due to freighter cancellations in Nicaragua and Honduras, space is limited and need to be blocked in advance , preferable as priority cargo. Airlines expect to have more regular frequencies by the end of August.
Flights from Mexico to Brazil overdemand, we need to block space at least one week in advance.
Additional flights from Mexico to South East / North East Asia.