Embracing Volatility – How Data Is Revolutionising Freight Procurement

Market volatility has flipped the logistics script. Shippers have been forced to rethink how they procure ocean and air freight, moving towards greater flexibility, resilience, and—most importantly—data-driven decision-making. This isn’t just a tweak to existing strategies; it’s a full-blown reimagining of freight procurement in an era of disruption.

Let’s face it: we’re navigating uncharted waters. Rate fluctuations, capacity squeezes, and ever-shifting demand patterns mean business-as-usual is no longer an option. Real-time freight intelligence is the superpower shippers—and their Logistics Service Providers (LSPs)—need to thrive, not just survive. It’s not just about rates and spreadsheets; it’s about building resilient supply chains that can weather any storm while maximising ROI.

1. Negotiating with Precision: Smarter, Data-Driven Decisions

ROI Impact: Competitive rates. No overpayments.

Real-time freight intelligence keeps you informed about rate trends, capacity, and carrier pricing tactics. Armed with data, shippers can challenge inflated premiums and negotiate from a position of strength. The result? Big savings and smarter partnerships, with cost reductions of up to 30% reported in certain cases, equating to millions saved annually on key shipping lanes.

2. Forecasting: Protecting Your Budget (and Your Sanity)

ROI Impact: 50% better budget accuracy, as reported by a Fortune 500 company.

Cost forecasting isn’t glamorous, but it’s critical. Freight data gives you visibility into surcharges, spot rates, long-term agreements, and market trends, helping you plan with laser-sharp accuracy. This isn’t just saving pennies—it’s about sidestepping financial landmines that blow up your P&L.

3. Benchmarking: The Confidence to Demand Better

ROI Impact: Better service. Better terms.

Comparing your performance and costs against market benchmarks ensures you’re not leaving money on the table or settling for subpar service. Tools that aggregate hundreds of millions of rates empower shippers and LSPs to push for better service guarantees, lower surcharges, or contractual improvements. With this collective intelligence, negotiation is no longer a guessing game; it’s a precise, data-driven process.

4. Reacting in Real Time: Stay Agile in Chaos

ROI Impact: Losses minimised, decisions aligned.

In logistics, chaos is inevitable. But reacting to it doesn’t have to be. When capacity dries up or rates spike, real-time intelligence lets you pivot on a dime—securing alternative carriers or adjusting strategies while keeping costs in check.

This level of visibility aligns teams across finance, operations, and procurement, ensuring everyone is on the same page when the heat’s on. Quick decisions, fewer silos, smoother operations.

5. Better Relationships: Collaboration That Works

ROI Impact: Long-term savings, future-proof supply chains.

Freight procurement is still a relationship game, but volatility strains even the strongest ties. Real-time data can shift the dynamic by providing transparency, neutrality, and shared insights. This fosters trust, enabling innovative collaborations like capacity-sharing agreements, dynamic pricing, or joint sustainability initiatives.

Instead of fighting over margins, shippers and LSPs can work together to tackle the big stuff—like reducing emissions or designing supply chains that can withstand future shocks.

Why Real-Time Freight Intelligence Is Non-Negotiable

For most shippers, data has historically been a pre-tender tool. But in today’s climate, relying on static benchmarks is like navigating a storm with last week’s weather report. From 2019 to 2024, we’ve seen how rapidly markets can shift. Waiting until the next contract cycle to adjust is a recipe for disaster.

Data is the compass shippers and LSPs need—not just during tender negotiations, but as a constant tool for building resilient, sustainable supply chains. It’s time to integrate real-time freight intelligence into every aspect of your strategy. With dynamic insights, you can outmanoeuvre uncertainty, build flexibility, and create lasting value for your business.

E-commerce Drives Two-Thirds of Airfreight from China as Rates Surge Amid Capacity Crunch

Ecommerce is reshaping the air cargo landscape, now accounting for an estimated two-thirds of airfreight originating from China. As demand soars, freighter operators are leveraging the momentum to increase contract rates for 2024, making this peak season pivotal for the logistics industry.

A Shanghai-based logistics provider remarked:

“The rates this week to Europe and the US exceed the highest recorded last year. Ecommerce is the key driver, with volumes making up a significant portion of overall cargo.”

Rates on the Rise: A Data-Driven Snapshot

According to WorldACD, global air cargo rates rose by 2% week-on-week, hitting $2.84 per kg as of 1 December—the highest this year. Spot rates saw a 3% increase, driven by a 4% jump from Asia Pacific and a 3% rise from North America. The statistics tell a compelling story:

  • China: $5.10 per kg (+7%)
  • Hong Kong: $6.25 (+9%)
  • Japan: $4.97 (+6%)
  • South Korea: $5.49 (+6%)
  • Taiwan: $4.07 (+5%)
  • Vietnam: $4.88 (+3%)

Year-on-year, rates surged over 30% from Japan and Vietnam, and 46% from Taiwan, underlining the immense growth in demand from these markets.

Ecommerce, Congestion, and a Growing Need for Data Visibility

While ecommerce is driving demand, capacity constraints and airport congestion remain pressing challenges. The seasonal peak is expected to ease temporarily during Christmas but will ramp up again ahead of Chinese New Year on 28 January. The situation is further compounded by a pre-tariff rush ahead of potential US import tariffs in early 2025, prompting businesses to stockpile goods.

Freighter operators are already responding with record-high proposed rates for 2024, with increases of over £1.10 per kgto Europe, compared to the prior year. This trend emphasises the growing complexity of managing supply chains amid volatile market conditions.

As demand continues to outpace supply, the industry faces mounting pressure to adopt advanced supply chain visibility and climate impact software. These tools can provide real-time data insights, empowering BCOs and Logistics Service Providers (LSPs) to make data-driven decisions and counteract supply chain disruptions effectively. Such visibility is no longer optional—it’s critical for navigating the complexities of modern logistics.

Industry Insights: A Maturing Air Cargo Market

Despite these challenges, experts note that the industry is demonstrating newfound maturity. Niall van de Wouw, Chief Airfreight Officer at Xeneta, stated:

“We’re witnessing a more grown-up air cargo market, with better resource allocation and improved terms for all parties involved. The industry is firing on all cylinders, but it’s under control—unlike the chaos of prior peaks.”

This level-headed approach is key to maintaining stability as markets evolve. However, with shifting trade routes driven by the relocation of manufacturing to Southeast Asia, businesses must adapt their strategies to remain competitive.

Looking Ahead

The air cargo market is evolving rapidly, driven by ecommerce demand, trade policy shifts, and capacity challenges. To stay ahead, LSPs and BCOs must adopt real-time supply chain visibility solutions. These tools will empower them to make informed, critical decisions, ensuring they remain resilient in a dynamic global market.

Asia’s Rising Stars: Vietnam, Thailand, and South Korea Ride the Wave of US Trade Policy Shifts

The planned tariffs on Chinese products by US president-elect Donald Trump are reshaping global trade flows, boosting containerised imports from Vietnam, Thailand, and South Korea. These nations have experienced remarkable growth in exports to the US since 2017, presenting both opportunities and challenges for supply chain resilience and climate-conscious operations.

According to a Linerlytica report, Vietnam’s container exports to the US exceeded 2 million TEU in the first 10 months of 2024, more than double the volumes of 2017. Notably, Q2 2024 saw a 41% year-on-year increase in exports, primarily manufactured goods, as businesses continued to diversify supply chains away from China. Vietnam’s appeal lies in its educated workforce, low operational costs, and improving US diplomatic relations.

Thailand has also emerged as a significant player, tripling its exports to the US since 2017. The first 10 months of 2024 recorded approximately 900,000 TEU, with October alone showing a 25% year-on-year increase. Driven by farm and food products, Thailand’s trade policies have further cemented its position as a key exporter, with domestic partnerships benefitting US firms operating in the country.

South Korea’s containerised exports to the US exceeded 1 million TEU between January and October 2024, compared to around 600,000 TEU in 2017. Electrical appliances, machinery, and equipment drove this growth, according to analyst Tan Hua Joo.

Meanwhile, China’s share of US imports from Asia has dropped from 70.4% in 2017 to 58.9% in 2024, reflecting a significant shift. Yet, China remains the largest origin country for containerised imports, even as Vietnam, South Korea, and Thailand take the lead in volume and market share gains.

The Role of Visibility in Supply Chain Management

This rapid shift in trade dynamics underscores the growing need for supply chain visibility and climate impact software. As Beneficial Cargo Owners (BCOs) and Logistics Service Providers (LSPs) navigate complex, shifting trade patterns, real-time data insights are becoming indispensable. These tools enable stakeholders to make business-critical decisions, mitigating risks such as tariff impositions and environmental impacts, while optimising the supply chain for efficiency and sustainability.

For instance, Vietnam’s efforts to avoid trade sanctions, such as importing US soybeans and aircraft, highlight how trade policy volatility can impact supply chains. With visibility tools, LSPs can respond to such challenges by forecasting disruptions and adapting their logistics strategies.

Linerlytica notes that while the proposed 10% tariff on Chinese goods is less severe than the 60% initially suggested, the policy still has cascading effects. Vietnam, South Korea, and Thailand, as the fastest-growing exporters, stand to gain. However, the unpredictability of these trade measures emphasises the importance of advanced analytics to support resilient, climate-conscious supply chains.

Hapag-Lloyd Doubles Down on Green Methanol for a Decarbonised Future

German shipping giant Hapag-Lloyd has signed a ground-breaking agreement with China’s Goldwind to secure 250,000 tonnes of green methanol annually, adding a significant boost to the 500,000-tonne Maersk agreement made in late 2023. This commitment reinforces Hapag-Lloyd’s position at the forefront of sustainable shipping and builds momentum for decarbonisation efforts across the maritime industry.

The agreement, spanning more than a decade, will see supplies of green methanol begin in 2026. The initiative forms part of Hapag-Lloyd’s Strategy 2030, a comprehensive plan to meet the Paris Agreement’s 1.5-degree climate target. CEO Rolf Habben Jansen emphasised the company’s commitment to sustainable investments, stating:

“With the agreement, we are securing a significant proportion of our requirements for green fuels. This is a critical step toward our ultimate goal of achieving net-zero fleet operations by 2045.”

Hapag-Lloyd’s strategy includes retrofitting methanol dual-fuel capabilities to five vessels, funded by green-insetting premiums paid by environmentally-conscious customers. This move not only aligns with global decarbonisation goals but also positions Hapag-Lloyd to adapt to future EU renewable fuel quotas, known as RFNBO obligations, under the FuelEU Maritime framework.

A Balancing Act in Maritime Fuels

While LNG continues to gain traction among top competitors like Maersk and CMA CGM, Hapag-Lloyd’s pivot to green methanol signals a calculated hedging strategy. The flexibility to retrofit LNG-fuelled vessels to methanol provides a future-proof option should market dynamics or regulatory landscapes shift.

The challenges of retrofitting were exemplified by Maersk’s Halifax project, which took eight months of off-hire time and a dramatic 15-metre vessel extension. Despite these complexities, methanol retrofits could offer smoother transitions compared to conventional ships.

Hapag-Lloyd’s investments come amid concerns about green methanol’s long-term scalability due to limited biogenic CO2 feedstocks. However, these constraints are dwarfed by the immediate issue of securing start-up capital to scale production capacity.

Real-Time Insights for Smarter Supply Chains

The shift towards alternative fuels highlights an emerging need: real-time visibility into supply chain emissions and climate impacts. As companies like Hapag-Lloyd blaze trails in decarbonisation, Beneficial Cargo Owners (BCOs) and Logistics Service Providers (LSPs) must adapt quickly. Visibility software can empower stakeholders with real-time data insights to make critical decisions, from route optimisation to fuel choice, mitigating disruptions and aligning supply chain operations with sustainability targets.

Hapag-Lloyd’s dual-fuel strategy is not just about compliance; it represents a blueprint for how liner shipping can transform through technology and collaboration. The adoption of visibility tools will ensure that as fuel technologies evolve, supply chains remain resilient, transparent, and aligned with global decarbonisation goals.

Rolf Habben Jansen summed it up best:

“It is and remains our ambition to play a leading role in the transformation of the liner shipping industry.”