• Forwarding & Shipping
  • Warehousing & Distribution
  • Breakbulk Terminals

How to: reduce costs by switching from container to bulk transportation

Are you a company who wants to reduce its transportation costs, but doesn’t know how to execute this? How about switching to a different form of transportation! Instead of transporting your big bags or IBC’s in the traditional containers, there is another way: bulk transport or bulk shipment. In this blog, we explain how your product can be transported more efficiently and environmentally friendly and, most importantly, how you can avoid higher container prices. Are you interested in this change in shipping? We'll explain why this could be an intriguing move for your business.

The recent global supply chain disruptions
With the growing challenges which the world is facing, we are experiencing various disruptions in our global supply chain. Unfortunately, this will not be over soon. We had various interferences like COVID-19 and more recently, the conflict between Russia and Ukraine. This is not the first major disruptive event and it will not be the last. To avoid and prepare for these developments, companies need to adjust their strategic focus to not only survive regular disruptions, but also to benefit from them. Some of the immediate impacts of these global supply chain disruptions are as follows.

Rising container prices and lower profit margins

The cost of shipping containers peaks during our recent global disruptions. The average port-to-port spot prices from Shanghai to Rotterdam have skyrocketed from $1,800 in early 2020 to more than $12,000 in July (see Figure 1). Figure 1 - container price trend. Source: Drewry. This development means that the total cost of container transport has risen by more than 500%. In addition, UNCTAD (United Nations Conference on Trade and Development) warns us that global consumer prices will continue to rise in our current year, 2022. This will lead to significantly lower profit margins and will put pressure on the logistics supply chain. This will mean that other solutions for trading goods from Asia to Europe will be especially attractive to producers of and traders in bulk. 

Less capacity and an almost impenetrable container market
Less capacity and high demand for containers in the container market have caused current container prices to rise dramatically over the past year. Carriers have dispatched more vessels, enabling them to ship more containers in the current strained market. This has definitely not alleviated the pressure on the container market. With the top ten liners controlling 85% of the market, these companies’ accessibility to places on the vessels is entirely controlled. This makes it hard for smaller players to secure a spot on the vessel while paying an exorbitant price. By switching to bulk shipping, these obstacles could be avoided.

Growing volumes and port congestion
As the volumes of large container ships increase, ships arriving at the port cannot load or unload their cargo. This is a direct result of terminals already being overcrowded and therefore full. This is also known as port congestion. Only one-third of all container ships arrive on schedule, according to the latest performance report from Sea-Intelligence Maritime Analysis. The result is low reliability due to bottlenecks and long delays. Late arrivals also further drive up costs for shippers.

Sustainability and participation 
Sustainability arguments continue to be leading topics in 2022. Among these topics, deep-sea vessels are always at the forefront of the energy transition. There are several 'green' solutions that can be chosen from the deep-sea terminal to an inland terminal. By choosing intermodal solutions for the last inland kilometers, such as barge or rail transport, you can substantially contribute to a greener aggregation of cargo transport.

Changing transportation as a solution
By transporting your large shipment and cargo in a bulk carrier or ship, you avoid the crowded and controlled container market and save a lot of space, money and administration. Upon arrival of the bulk carrier at the terminal, options for storage and transshipment and value-added services are needed to optimally serve the end market. The project forwarding department of Broekman Logistics can arrange the bulk transport by sea and take care of all the administration and documentation. Using your own project service terminal, Broekman Logistics can add the value you want to your shipment.

Do you want more information? Please get in contact with our expert Mark de Laat.

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