By Bruce Rodgers, Executive Director, CIFFA
When faced with adversity and obstacles, the Canadian freight forwarding community quickly adapts to the changing environment, continuing to service its clients with flexibility and minimal disruption.
This year has been exceptionally challenging, and hopefully we never again see a repeat of similar challenges presenting with such forceful magnitude. We started 2020 with factory shut-downs as COVID-19 hit China, impacting supply chains globally. This was followed by rail blockades interrupting the flow of goods, and then the Canadian federal government’s decision to protect the lives of Canadians by shutting down non-essential businesses. Most recently, the longshoremen’s strike at the Port of Montreal impacted Eastern Canada, resulting in carrier diversions and increased costs. All of this, and the year is not yet over.
Through all of this chaos and uncertainty, the freight forwarders have continued to deliver and to overcome each of these obstacles, with an unrelenting and unwavering focus on serving their clients.
The air sector has been the hardest hit from COVID-19, with IATA (the International Air Transport Association) reporting that the number of passenger flights globally were down 95 per cent compared to 2019. As of the end of June, IATA reported that this equated to a reduction of more than 1 million flights. These flights, which typically move approximately 45-50 per cent of cargo in the belly holds of passenger aircraft, resulted in immediate and drastic measures being taken. Forwarders worked in conjunction with their airline partners, converting grounded passenger flights to all-cargo, quickly adapting to this changing landscape. Air Canada reported operating more than 2,000 all-cargo international flights in the second quarter, to assist the forwarders in the movement of required goods and personal protective equipment. In the third quarter, Air Canada said that it is planning to operate up to 100 all-cargo flights per week, effectively doubling cargo space.
Forwarders were also put to the test by the changing environment of the marine sector. As new or changing trade agreements changed historical sourcing patterns, factory closures both overseas and at home resulted in delayed or cancelled orders, and blank sailings have led and continue to result in longer lead times, reduced capacity, higher rates and overbooking, which also results in rolled containers. Canadian freight forwarders have adapted well to the constantly shifting conditions, often balancing the disruptive factors in the maritime sector with satisfying client demands.
In addition to the above, COVID-19 could become a key catalyst for digital and technological transformation within the freight forwarding industry. There is a continuous demand for low-cost shipping, service reliability and dependability, seamless integration, visibility, and transparency. It is becoming essential that new online digital platforms be available to clients. The highly competitive technological offerings present many variables to the shipping industry. The only constant is that the forwarders must keep an open, learning mind on the changing landscape.
Global trade is expected to fall 13-32 per cent in 2020, as COVID 19 disrupts economic activity and normal life around the world. Freight forwarders must have agile processes in place to quickly adapt to the changing patterns and client demands. As shown in 2020, Canadian freight forwarders have proven to be up to the challenge.