Why Freight Forwarders Are the Calm in a Storm

Why Freight Forwarders Are the Calm in a Storm

Weather disasters have an enormous impact on the ocean freight industry. Extreme weather can bring shipping to a standstill, and the effects of a natural disaster resonate well after the event itself. Last year, Hurricanes Harvey and Irma crippled freight services in the mainland United States and Puerto Rico. In 2005, Hurricane Katrina affected shipping on the Gulf Coast so dramatically that its negative impact was still felt for years after.

Now, with Hurricane Lane bearing down on Hawaii, it’s a good time to remind ourselves how the logistics industry can handle disruptions of service from unpredictable catastrophic events.

Freight Forwarders: Follow Your Partners

Hurricane season has been starting earlier and lasting longer than in past years. And the holiday-centric peak shipping season has been starting earlier too. As a forwarder, you’re more likely to have containers sailing right before, during, or after a major storm.

Your partners will keep you informed of the latest weather-related updates. NVOCC’s and carriers communicate service changes during natural disasters, so make sure you’re paying attention to their messages. It’s up to Freight Forwarders to keep their customers in the loop. There are many unknowns when facing adverse weather, so it’s extra-important to seek out, analyze, and communicate the information you do have.

Be Aware of Federal Statutes

Around this time last year, there was a lot of confusion around the Jones Act and how it would affect shipments to Puerto Rico. A quick refresher: established to promote the American maritime industry, the Jones Act (also known as the Merchant Marine Act of 1920) requires goods transported between US ports to be carried by US ships only. Hawaii is subject to the same restrictions as Puerto Rico was under the Jones Act.

We often think about federal and international trade policies in the best times, but they can drastically change the cost of shipping in the wake of a disaster. It’s important to research how federal statutes could help or harm your most-popular trade lanes, especially when that lane is getting hammered by awful weather.

Calm Your Customers with Details

Sailing dates, arrival dates, and travel time will get delayed by bad weather. Containers can get damaged or even lost in a hurricane. When a disaster is happening, there isn’t much you can do to stop its adverse effect on your shipment.

Determining additional costs, new delivery dates, or even a new sailing schedule will come later and requires collaboration between forwarders, NVOCC’s, and carriers before a plan is put into play. But even when details are murky, you’re probably not operating in a complete void.

Your customers will want specifics to calm their concerns. And while every national disaster is different, certain patterns can help you provide broad projections to all the stakeholders in a shipment.

When you communicate with your customers, try to give them as much information as you can. If you expect your shipment will be delayed, don’t just settle for that update; find out approximately when that shipment will reach its destination. If a shipment is damaged, find out what your partners can do to reimburse your customer. In doing so, you may not be able to minimize the damage from a storm, but it can be an opportunity to maximize the trusting relationship between you and your client.

Read More: Disaster and the Logistics of Black Swans

It’s easy to get things from A to B when everything sails smoothly. But managing the minute by minute contingencies of a highly unusual weather event requires human judgment, experience, and understanding. Simply put, a highly unusual weather event needs a Freight Forwarder’s touch.

For all the efficiency technology lends to the ocean-freight industry, this is an area where you as a professional can add unparalleled value.

Get started with CoLoadX today.

By: Fauad on Aug. 24, 2018, 11:11 a.m.