Global Logistics 2021 Outlook
Featuring Mike Greco, Senior Vice President of Global at NFI
What do you think will be in store for global logistics in 2021?
When we look at 2021, Q1 is going to be strong, especially on the import side. Then we start entering into contract negotiations to determine where rates will settle for the year. I’m predicting rates will be about a thousand dollars higher than last year’s contract rate for beneficial cargo owners (BCOs) and forwarders. Consumer confidence will play a big part and we are all wondering how will that look after Q1 with a new administration. Will the new stimulus package be enacted and will that spur the economy as it did in 2020? When I look at the first half of 2021, it’s going to be a good first half, but when you look at Q3 and Q4, it’ll be interesting. That’s where it’ll be challenging to see how the country settles in, how the COVID vaccine takes place throughout the country, and if there’s any other further lockdown. There’s a lot of those variables that we don’t know.
What should shippers consider as we enter the new year?
What shippers need to do is communicate with their service providers. The more information that’s shared between shippers and service providers regarding forecasts, potential challenges, and potential delivery dates that need to be met becomes more important now than ever. Having that intimate relationship with your service provider is really going to help mitigate and help anticipate possible disruptions. The advice to shippers would be to communicate with your service providers and to work with more than one provider to have different options made available that can then help mitigate risk.
What will exporters experience in 2021?
What’s really interesting is when you look at the export market in 2020 versus 2019, we’re down 14% as an exporting country. A lot has to do with COVID and also our big trade imbalance that we have with Asia and primarily China. What’s interesting is that there is such a demand for equipment. It’s more economical and beneficial to actually get containers that are empty to China that they can reload and position at four or five times the profit level of shipping containers here that need to be manifested and put on board. What we hope from an export community is that the trade deals that are in place really start to become fulfilled, meaning that the exports that China has been required to buy in other countries, we start to see that really ramp up. You hope that with the new administration coming in, they would sign new trade deals that are going to promote our exports. When we look at 2021 on the export side, we’re hoping that we see a better growth than we did in 2020. A lot of that will be spurred by the global economy, how the economy starts to purchase U.S. goods again, and how we can then service it to be able to deliver on those goods.
Why is it important for shippers to ensure their freight forwarding partners have established relationships with the steamship lines?
The lessons learned in 2020 is that when capacity becomes a premium and becomes a numbers game of trying to pay your way onboard that ship, or pay your way onboard that airline, being able to have multiple partners to go to and see what type of space allocation that partner has is going to be key. Being able to be agile in making decisions is one thing that NFI has done very well by having boots on the ground in Asia, looking at that weekly capacity, and being able to manage capacity to find the space that’s available. As a shipper, the trend will be to work with more than one provider, positioning themselves to have some flexibility, a beneficial cargo contract, and being able to partner and commit some containers to different forwarders that serve as a compliment to a base contract that could be in place. Being able to be agile and diversified will be key in 2021.
How have NFI’s solutions evolved to support shippers in 2021?
Our solutions are continually evolving. We’re able to provide our clients with warehouse distribution solutions that are now needed more than ever, and being able then to fill those distribution centers with a global economy. In global shipping, we’re able to provide multimodal air freight, ocean freight, and many land-bridge solutions to keep that fluid supply chain moving. That is how we will continue to develop into 2021 and beyond. Then, we have port services and our own trucks, it definitely gives you an advantage to keeping that supply chain moving and keeping it fluid.
The unpredictable nature of 2020 has made us become smarter. I think it’s made us become more predictable in aligning ourselves with solutions and aligning ourselves with being able to adapt and provide different logistics scenarios that are going to keep supply chains moving. We’re able to source effectively, look at different space allocations, secure that space, and ultimately bring it into or out of the country. Having those solutions to help bring goods to market is going to be how successful companies navigate 2021 and beyond.
Joining NFI in 2017, Mike Greco brings years of industry expertise to the organization and is in charge of NFI’s North American global business where he works to seamlessly provide end-to-end solutions for NFI customers.