The Covid-19 crisis and fuel shortages have significantly reshuffled the cards of global freight. Thus, since the second half of 2020, the logistics chain has been suffering the consequences of successive lockdowns, port strikes, congestion on maritime routes, the lack of truck drivers, etc. These result in the increase and multiplication of the price of transporting goods, especially when they use the seas and oceans.
State of play of the freight transport market
The transport market faces several challenges. It must make its ecological transition in order to reduce its greenhouse gas emissions while responding to the constant pressure of demand, itself supported by the considerable growth of e-commerce. Online sales are also leading companies to review their logistics and delivery methods.
The transport of goods thus beats all records of activity. However, the sea route remains privileged for international trade. But since the end of 2020, the price of transporting a container has multiplied by 5. According to the Freightos Baltoc Index, the average cost of renting a container rose from $2,240 in 2019 to $9,950 at the end of 2020.
This inflation is even more pronounced on the most strategic trade routes, namely those linking the east of the Asian continent to the American west coast.
The reasons for the increase in sea, air and road freight prices
Since the beginning of the pandemic, the price of renting a standard container has increased by 650%. There are several reasons for this record rise in the cost of maritime freight transport, which is also leading to a surge in prices. Among them, the COVID-19 crisis, which has led to the slowdown or even the outright shutdown of several ports of global importance, particularly in China. The country’s largest port terminal, Yantian, ceased all activity for 2 weeks in May 2021, permanently curbing international trade.
Also, this sector has been strongly impacted by the rise in fuel prices and inflation, which has been particularly harmful for transport. In addition, this price increase is also explained by the increase in vehicle ownership costs (8% in 2021) and by the surge in toll prices for road transport throughout 2022. This phenomenon is observed throughout the euro area where inflation has reached a record level of 8.6%. (source: auto-info)
An average cost increase of 8.8% in 2023
Despite the economic uncertainties, the CNR risks forecasts for 2023. It anticipates an increase in the full cost price of heavy goods vehicles of around +8.8%, on an annual average.
The reasons? The increase in the personal driving position, the cost of which is estimated at +12.7% on average annually (salaries and expenses), the probable growth in maintenance (+6.6%), the increase in tolls of +4.6% and the costs of holding equipment: +4.3%.
As a result of the strike movement that paralyzes oil refineries, gasoline and diesel have become rare products in petrol stations. Our tips to maximize the range of your car.
There is no doubt that the fuel has made a lot of noise this year. After the Russian invasion of Ukraine earlier this year caused prices in resorts to skyrocket, it is now a strike movement that is causing the shortage in France. According to government figures, 30% of petrol stations are dry. But in some regions, the situation is more serious, particularly in North Dakota, where nearly half of the service stations are facing supply difficulties.
Add to this the price increases at petrol stations since the beginning of October (SP95-E10 petrol costs on average + 10 cents per liter, diesel +14 cents per liter), and you understand the importance of getting the most out of your tank. There are no miracle solutions, and to reduce consumption, we must drive more responsibly. A practice that has a name; eco-driving.
Maintain your car
Before you think about saving fuel, make sure your vehicle is in good condition. Poor maintenance can lead to excessive consumption due to clogged candles or filters. Also, check the condition and pressure of your tires every month. Not only is driving with underinflated tires dangerous, but increased friction on the road can also lead to a 10% increase in fuel consumption.
Empty your trunk
The lighter the car, the less it consumes. Logic. There is no need to remove the back seat or spare wheel and remember to remove any heavy or bulky items from your luggage that you do not need to carry. When returning from vacation, remove the roof box as it can affect the aerodynamics of the vehicle.
A good driver should be as flexible as possible. Therefore, avoid sudden accelerations and excessive revs. If your vehicle is equipped with a manual transmission, it is best to shift gears to around 2,000 rpm on a modern diesel or turbo petrol engine, as maximum torque is available at low revs. Anticipation is also an important criterion for good economic momentum. If you see a traffic light turning red in the distance, or if you approach a roundabout or stop sign, take your foot off. Not only do you use fewer brakes, but the engine doesn’t consume a drop of fuel during slowdowns because it’s only driven by wheel inertia. This is not the case when you go back to neutral.
Keep a constant speed
This is especially true on expressways. The more constant the speed, the less energy the engine needs to move forward. As it is not always easy to keep the same pressure on the accelerator pedal, manufacturers invented cruise control. If your car is equipped with it (cruise control or speed limiter), activate it to keep the same speed when traffic is fluid. Beware, however, of so-called “adaptive” regulators that tend to brake too much when approaching a car or truck to then reaccelerate.
Avoid short trips
Do you take the car to pick it up at the bakery located less than 300 meters from your home? You’re going to have to break that bad habit if you can of course. During very short trips, the engine does not have time to heat up. This “cold” use has only negative effects on your mechanics (acceleration of wear, overconsumption of fuel).
Turn off the air conditioning or close the windows
The AC works well when it’s hot in the car. But it’s energy intensive. Overconsumption of fuel is estimated at about 0.7 l/100 km, but depending on the temperature setting, this figure can climb quickly. A tip: park in the shade on hot days and open the windows when driving at low speed (less than 60 km/h). On the contrary, it is recommended to close the windows on the highway, since wind resistance increases, which can increase consumption by about 5%. Start the air conditioner at a temperature quite close to the outside temperature (within 5 degrees of difference).
There is no secret: the more you lift your feet, the less you consume. This is especially true on highways where fuel consumption increases exponentially. By reducing your speed from 130 km/h to 120 km/h, you have saved an average of 10% in fuel consumption. That’s huge.
The different modes of transport in logistics are at the center of any business strategy. They include common activities such as storing, handling, packing, routing, and transporting goods. The choice of a means of transport adapted to the management of the Supply Chain is a real problem, to which business leaders are trying to provide an adequate response.
There is a multitude of types of transport. In logistics, there are 4 main ones: road, sea, rail, and air. Depending on the company’s industry, it may be more strategic to adopt one mode of transportation over another. That said, each mode of transportation has its advantages and disadvantages.
Road transport means the transport of goods by cars, trucks, vans (industrial vehicles with less than 3.5 tonnes GVW according to French legislation), or trailers. It is the most common mode of land transport in France. It is also very popular in the rest of the world. The reason is simple: loading and unloading goods is much simpler compared to other modes of transport.
But that’s not all! Road transport is fast and economical for short trips. Thus, it is accessible to all companies, from SMEs to large companies. Above all, it is also very practical not only for short and direct journeys but also for long-distance transport, because it promotes door-to-door canvassing.
However, road transport does not only have advantages. One of the major disadvantages remains the emission of combustion gases responsible for the greenhouse effect. Thus, it can be a public health problem. At a time when environmental issues are at the heart of governments’ agendas, this is sobering. In addition, road congestion at certain times of the day is likely to delay deliveries.
To this must be added:
The risk of an accident;
the risk of theft;
a fairly small storage capacity.
Popular in Russia and the United States, rail freight transport is less widespread in France. It accounts for less than 10% of national freight transport. However, it offers quite interesting advantages. Indeed, this mode of transport is suitable for particularly heavy goods and long journeys. The impact on the price is really minimal. The train, in addition to participating in the decongestion of the roads, offers a large storage capacity. This quantity may become increasingly important as the number of cars increases.
These advantages must be associated with a number of disadvantages. Thus, since it is land transport, the risk of accidents is high. There are 5 main risks associated with rail transport:
Derailment, i.e. when the train leaves the rails due to a switch problem, excessive speed, or mechanical failure;
catch-up, where the impact between two trains, one of which was stamped at the rear by the other;
Slingshot, which occurs when two trains collide on sides when arriving simultaneously at an intersection;
the nose-to-nose, i.e. the head-on collision between two trains arriving in front of each other;
collision with an obstacle, when the train collides with rubble obstructing the track or a land vehicle parked on the tracks.
In addition, freight transport by rail takes longer than by road. It takes between 1 and 3 days for additional delivery. We can also point out:
Lack of railway infrastructure;
heavy handling requirements for loading and unloading goods, resulting in losses;
the high rate of damage with fairly frequent delays.
Historically, ocean freight has been the most frequently used transportation for companies with large volumes. Over time and with technological developments, it has become a safe and fast means of transport to transport more and more cargo around the world. Sea freight is without context the most common means of transport. If it arouses the interest of large companies, it is because it offers a large storage capacity.
If sea freight is advantageous, it is also because a ship can transport all kinds of goods, solid or liquid, packaged or not: petroleum products, vehicles, crates, machinery, oversized pallets, etc. The maritime transport of goods offers other advantages. It is considered the most environmentally friendly mode of transport given the volume of goods it is able to transport in a single shipment. In addition, a boat consumes less energy than a train, plane, or truck.
It is also a competitive mode of transport with high potential, in which degressive tariffs are charged. Thus, compared to other means of transport such as air freight, sea freight is very profitable over distances exceeding 500 km. It is also much safer than land transport by road and rail. This is an important criterion, not only because the risk of an accident is low, but also because the transport of dangerous goods is allowed.
However, sea freight has disadvantages:
Customs procedures are cumbersome and time-consuming;
delivery times are quite long;
the boat is poorly suited to transporting fresh or rapidly perishable products;
The vessel is weather dependent and exposed to the risk of piracy.
It is the fastest mode of freight transport for long distances. It is especially suitable for transporting rapidly perishable products, such as foodstuffs, which may not survive a long journey, or fragile goods, such as weather-sensitive pharmaceuticals. Because of its speed, this mode of transport makes it possible to reduce the transit time of goods, which also has the advantage of avoiding disruptions in logistics chains.
Air transport is also a reliable means of transport. Not only does it have the lowest index in terms of claims, but it offers more guarantees for sending high-value items. There is also no risk of destruction before the destination, as items are placed in standardized containers that facilitate loading and unloading. We could also mention the safety offered by this mode of transport.