Tyre Market In Bangladesh : More Investors Needed

The demand for truck and bus radial tyres has been increasing rapidly in Bangladesh, but there is little domestic production in this segment to meet the rising demand.

The demand for tyres in Bangladesh has been increasing remarkably over a period of time due to the increase in number of vehicles both in commercial and personal space across the country. According to industry experts the demand for tyres has been increasing at an average rate of 9 per cent per annum due to the rising automobile sales, foreign investments and government support in the form of relatively lower import duties.

Though, it augurs well for local entrepreneurs in Bangladesh to grab the opportunity and ramp up their production, but the industry however has not risen up to the expectation and still remains largely dependent on imports. Currently Bangladesh imports tyres from countries like India, Japan, China, and Indonesia, as well as from a few European countries. The market size for automotive tyres in the country has now reached up to $58.90 million from $35.34 million in 2015, making it lucrative for both domestic and foreign players.

 Lacks investment and raw materials for production

Currently, only four local companies are making light automotive tyres taking advantage of the surging market. The companies including Gazi Group, Meghna Group, Rupsha Tyre, Apex Husain and a few others are manufacturing tyres for light trucks, microbuses, minibuses, motorcycles, auto-rickshaws and easy bikes. CEAT, originally an Indian brand, has agreed to set up a manufacturing plant with an investment of $4.99 million in collaboration with A K Khan Limited, a local company recently. 

The tyre manufacturing industry in Bangladesh is still lagging behind as the sector needs huge capital investments. The demand for tyre manufacturing in the country witnessed around 480,000 units annually in 2019 for heavy vehicles and private cars alone of which about 99 per cent met through imports only.

Moreover, scarcity of raw materials is another impediment for local tyre production in Bangladesh. But the situation may soon change as rubber, the main raw material used for making tyres, is currently setting a strong foothold in its production in the country. According to some reports, rubber production in the country has been growing at an average rate of 20.61 per cent per annum.

The tyre market in Bangladesh is dominated by the commercial vehicle tyre segment which takes about 80 per cent of the total demand for the product. Most of which however, is being met by non-branded Chinese tires which are often short of quality but low-cost.

Another large chunk of the Bangladesh tyre market is largely taken over by MRF Tyres, an Indian brand. There are however some private vehicles relying on more costly products like Yokohama, Dunlop and Maxxis offered by Japanese, Thai and US respectively. The Bangladesh tyre imports therefore exceed more than $11.78 million on importing more than 1.5 million tyres form different countries across the world.

Indian tyre exports on a roll

Post-Covid-pandemic exports from India increased in all segments of business and tyre exports too treading in the same growth path along with other commodities. India currently exports tyres to over 175 countries across the world. According to Ministry of Commerce and Industry’s latest statistics the country has exported $548.19 million worth of tyres in the year 2020-2021 (Apr-Nov).

According to Automotive Tyre Manufacturers Association (ATMA) healthy export growth in tyre exports has resulted in Indian tyre companies to invest more than $7 billion in the expansion of their capacities to meet the growing demand for tyres. According to ATMA tyre exports in the country in the FY21 have touched $189.39 million. The US tops the list of export destinations from India, accounting up to 17 per cent of the total export turnover. It is followed by Germany with seven per cent and Bangladesh with four per cent share.

Indian manufacturers are currently focusing on Truck & Bus Radial (TBR) tyre exports, as this segment has witnessed 30 per cent uptick in tyre exports from India recently. The exports from India to Bangladesh have increased in some commodities like rice and others in recent times.  The sudden spurt in demand for tyres in Bangladesh has helped Indian tyre manufacturers to expand their market in the neighbouring country. There are quite a few tyre manufacturers from Bangladesh who have entered into the market, but again most of them are involved in the production of tubes and tires for bicycles, rickshaws and auto-rickshaws. The demand for Truck & Bus Radial tyres has been increasing rapidly and domestically in Bangladesh there is little or no production in the sphere to meet the demand. Moreover, the increasing number of commercial vehicles and affluent consumers are also fuelling more tyre sales. Therefore, foreign players have entered into the market to fill the demand supply gaps in the Bangladesh tyre market. 

Tags : CEAT,

Up Above the World So High, We want the cargo in the Sky

Up Above the World So High, We want the cargo in the Sky

Global corporate giants such as General Electric (GE), Nestle, Abbott and others are not hesitating to take the aerial route to rush out of stock products for meeting market demand across geographies, unlike the usual seaborne shipment mode, one can sit up and take note of the current congestion, costs and timelines involved with regular shipping lines, containers terminals and ports world over.

Amid acute infant formula shortage in the USA, Nestle is flying in additional supplies from across the Atlantic to replenish supermarket shelves. Likewise, owing to work suspension at its Shanghai factory in zero Covid strategies implementing China, GE’s healthcare wing employed air freight to deliver a dye in short supply in the US, which is crucial for medical scans and tests. Similar was the case with Abbott, which was flying in powdered infant formula from Ireland, following contamination shutting down its plant in Sturgis, Michigan, even as the US Department of Defense is utilising contracts with commercial air cargo lines in ‘Operation Fly Formula’.

Meanwhile, top shipping lines such as CMA CGM, Maersk and Mediterranean Shipping Company (MSC) have eyed a plum business opportunity of catering to this rising air cargo demand by catapulting their shipping capabilities from the high seas into the blue skies as well. 

After record multi-billion dollar profits in the ensuing Covid years, ocean carriers are eager to capture the freight pie from the sky.

To better comprehend the emerging phenomenon, let us look at - 

What’s buoying freight from the sea to sky?

Emerging shipping line – airline collaborations

Boeing bullish on cargo aircraft demand

Advantages of air freight

What’s buoying freight from sea to sky?

According to a World Bank note, air freight is 12 – 16 times more expensive than sea transport and 4 – 5 times pricier than road transport. However, the Coronavirus pandemic, unprecedented e-commerce demand, congestion at ports, shortage of shipping containers and several other factors skyrocketed shipping costs through ocean carriers.  

A Nasdaq report noted that container management is still sub-optimal with continuing lag in container ships’ movement at ports, resulting in limited availability of containers as well as a delay in loading and unloading operations. Amidst these conditions, demand is still high, which is fuelling the surge in prices.  

Maersk also observed that up to 15 percent of global containership capacity was out of circulation in 2021 due to congestion. Similarly, Kuehne + Nagel highlighted that nearly 80 percent of global sea freight was disrupted due to congestion in north American ports. 

Shipping costs shot up to unprecedented levels, so much so that the gap between ocean freight and air freight has drastically narrowed, opening windows of opportunities for shippers and shipping lines.  

According to Ti Research, a strategic advisory services provider to the logistics sector, cargo owners have increasingly shifted from sea to air, bolstered by narrowed price gap which led to the air freight market doubling. 

Incidentally, global freight forwarding market sprung up to its strongest growth in a decade, logging 11.2 percent growth, valued at around $285 billion while the global tradeshow was up by 13 percent to $28.5 trillion. For further insights, consider the Cargolux case. After struggling for years to break even, air cargo player Cargolux witnessed revenues of $4.4 billion and a profit after tax of $1.3 billion in 2021, as much as 70 percent greater than in 2020. 

Moreover, easing global Coronavirus lockdown restrictions, booming demand for goods, propelled by economic stimulus packages in several countries, expanding e-commerce, rise in free trade agreements and other factors drove up growth and ultimately global digital freight forwarding market. 

Despite these favourable conditions, ocean carriers missed out on a chunk of this demand to air cargo due to a shortage of carrier capacity and port congestion, including a mismatch between supply and demand.

Compared to sea freight’s growth of 6.6 percent, estimated around $156 billion, airfreight growth was gauged to have doubled up to 15 percent, amounting to $128 billion while the latter’s rates rose up by nearly 70 percent. 

Amid this backdrop, air cargo dropped from being 12 times more expensive than ocean freight to just 2.5 times or ocean freight correspondingly became dearer in the past couple of years to narrow the gap so much, pushing traditional ocean shippers to not mind the slight premium on air freight. 

Despite the tailwinds for air freight, it continues to suffer from capacity constraints. Forwarders have concentrated on augmenting air freight capacity on key trade lanes as demand outstrips supply. Its capacity is estimated to be still nearly 11 percent lower than 2019. It is estimated that sea freight moves about 2 billion tonnes of global cargo when juxtaposed with 60 – 70 million tonnes flown through air freight.

Emerging shipping line – airline collaborations

On realizing the rise in air cargo demand, following the historic narrowing down of cost between sea freight and air freight, many shipping lines are inking pacts with airlines to cash in on the demand. Let’s take a look at these developments: 

CMA CGM – Air France – KLM 

The French shipping firm has signed an exclusive long-term strategic partnership in air cargo with Air France– KLM, flag carriers of France and Holland, to combine and complement their cargo networks for offering end-to-end logistical solutions, spanning the sea, land and air with a global footprint. 

In a decade long partnership, Marseille-based CMA CGM will strive to take a 9 percent stake in Air France – KLM, valued at $252 million. In addition to ‘significant revenue synergies, the collaboration boosts the ocean carrier’s non-maritime logistical capacities by augmenting an air cargo division it started a year ago. 

The three partners will operate an initial fleet of 10 full-freighter aircraft which will be augmented by 12 more on order. Six of them will be based at Paris-Charles de Gaulle airport and Amsterdam Airport Schipol, including the airlines’ existing belly capacity in 160 long-haul passenger aircraft.  

Both the partners will leverage their respective global sales teams under one voice, including Air France – KLM’s vast franchise, air freight capabilities and global cargo network, alongside CMA CGM’s large commercial network and global logistics platform for multi-modal freight services. 

Equipped with an extensive full freighter and wide-body belly aircraft network, Air France– KLM serve 295 destinations across 110 countries via Paris and Amsterdam airports, fitted with cutting edge cargo facilities. 

With teams manning 116 stations and covering a network of 390 handling stations spread across the globe, Air France – KLM’s commercial network happens to be one of the most resilient in the air freight realm, including expertise in lifting pharmaceuticals, perishables, express and others, plus one of the most advanced digital service solutions. 

According to the International Air Transport Association (IATA), air cargo operations of Air France, KLM and Martin air, a subsidiary of KLM rank them at the eighth spot in global air cargo traffic. Earlier, CMA CGM acquired CEVA Logistics in 2019, which also offers air freight with an annual capacity of 3.6 lakh tons through 14 international gateways and 1,000 facilities in 160 countries. 

Recently, CEVA Logistics won a prestigious multi-year contract from Italian Formula 1 racing ace Ferrari to be its team partner, which entails flying Ferrari equipment to Formula 1 races cross-country and cross-continent in a very short time-spaces.

In March 2021, CMA CGM created a new airline, CMA CGM Air Cargo, based out of Paris-Charles de Gaulle airport and dedicated to air freight. CMA CGM Air Cargo is equipped with four A 330 aircraft with a payload of 61 tonnes each, two B777s with a payload of 102 tonnes each and four more A350 aircraft slated to join its fleet in 2025. 

The French ocean carrier is a unique shipping line whose air freight operations are spread across three entities: CMA CGM Air Cargo, CEVA Logistics and Air France– KLM. It also acquired Ingram Micro’s Commerce & Lifecycle Services (CLS), Colis Prive and GEFCO.

Maersk Air Cargo

On April 8th, 2022 Maersk announced Maersk Air Cargo as its primary air freight offering to serve the logistical needs of its customers. Maersk Air Cargo is expected to operate full-fledged from the second half of 2022. 

The Danish carrier’s new air freight company emerged after transferring in-house aircraft operator Star Air, whose operations have been subsumed into Maersk Air Cargo. 

Maersk’s dedicated air cargo airline chose Billund, Denmark’s second-largest airport as its freight hub, from where it will deploy a controlled capacity of five aircraft, which include two new B777F and three leased B767 – 300 cargo aircraft. 

It will also add three new B767 – 300 freighters to serve US-China operations. These operations will initially be run by a third party operator. Eventually, Maersk aims to carry one-third of its annual air tonnage within its own controlled freight network. 

It is targeting to achieve this by a melange of owned and leased aircraft, mirroring the existing structure in its ocean fleet while the balance capacity will be met by chartered flight operators and strategic commercial airlines.

MSC & Lufthansa eye ITA Airways

Swiss ocean carrier heavyweight MSC and German Lufthansa airline together are interested in acquiring a stake in ITA Airways. Both the companies evinced interest with the Italian government to this end in January. 

The Italian government wants to sell the airline by June end and has set a deadline to receive binding offers by May 23. Besides MSC –Lufthansa, The U.S. Certares Fund along with Delta and Air France, and Indigo Partners investors have shown up as suitors. 

Though MSC and Lufthansa had asked for a 90-day exclusivity period back in January for fine-tuning their acquisition attempt, Italy did not relent and went ahead with a market-based approach. According to the Mediterranean nation’s economy minister Daniele Franco, a new buyer is expected to be at least 52 percent owned by a European entity. 

Incidentally, the German airline wants a minority stake in the purchase while the Swissshipping line is expected to take the majority stake in their bid. On fructification of this deal, Lufthansa envisages creating close commercial cooperation with ITA. Privatisation of ITA, successor airline of erstwhileAlitalia, will result in a reduced financial burden on the Italian state.

Boeing bullish on cargo aircraft demand

After a prolonged downside to demanding due to the Coronavirus pandemic and 737 Max model woes, Boeing, the top American aircraft manufacturer, is zeroing in on cargo business in the light of increasing airfreight demand. From 12 lines transforming passenger aircraft into freight planes, as many as 22 have proceeded to be so since the start of the Coronavirus pandemic. 

Alaska Air Group, America’s fifth-largest airline, made preparations to convert two midlife Boeing 737 – 800s into cargo aircraft, even as three Boeing 737 – 700s have been earmarked for freight in its fleet. 

According to an Investopedia report on Boeing, aircraft volumes have accelerated in the past six months, building on the initial demand driven by e-commerce in the early stages of the pandemic. 

Avalon Holdings Ltd, an aircraft leasing company highlighted that air cargo is expected to reach $150 billion in the current year, even as traffic is expected to double by 2040. Similarly, the Bureau of Transportation Statistics in the UShas projected the share of domestic and international airfreight to rise to 10percent in 2020 from 6 percent in 2018. 

In January, Boeing struck a $20 billion deal with Qatar Airways for nearly 50 of its 777-8, a new dual aisle jetliner, when it unveiled the model’s cargo version. Hindered by delays, Qatar airways is not likely to receive the cargoplanes until 2027, which prompted Boeing to salvage that order by agreeing to transform a third of an existing order of 60 777 – 8 passenger aircraft into cargo planes.

Advantages of air freight

It is the fastest mode of freight transport. As transit times are shorter, cargo must move quickly through the airport, unlike other forms of shipments. 

Air freight is generally deployed for time-sensitive commodities which may also carry high value per unit merchandise such as production samples, pharmaceuticals, fashion garments, documents, electronic consumer goods and perishable agricultural and seafood products among others.  

Air freight is also deployed to ship emergency spare parts and inputs needed for just-in-time production. 

Deploying air freight gives competitive advantages such as producers agreeing for short order times to avoid traditional shipments which may face delays in production or cargo clearance. 

Empowers diversifying strategy as manufacturers can ship products with shorter shelf-life, including offering bankable delivery of smaller volumes. On successfully establishing a market, manufacturers can set up supply chains using a mode of transport inexpensive than air freight. 

In some airports, all transactions are conducted electronically to clear cargo within a couple of hours round the clock.

Gangavaram Port to debut box terminal

Gangavaram Port to debut box terminal 

Gangavaram Port in India will build its first container terminal, which is scheduled to be operational by next year. The port stated the terminal is intended to offer momentum to the expansion of freight operations in the hinterland of Andhra Pradesh and neighboring industrial areas. 

With a cutting-edge terminal, the port said it will be able to provide significant advantages to the hinterland industries such as metal and minerals – ferroalloy, finished steel, aluminum, as well as seafood, agriculture, chemical, and pharma among others. With the arrival of the equipment, the project is likely to be fully commissioned by the second quarter of the fiscal year 2023.

India’s largest private ports and logistics company, Adani Ports and Special Economic Zone (APSEZ), completed the buy-out of Gangavaram Port last year with the acquisition of the Andhra Pradesh government’s stake of 10.4% for Rs 645 crore ($87.4m). The port handles a diverse mix of dry bulk commodities and it is the gateway port for a hinterland spread over eight states across eastern, western, southern and central India. 

Advantage Gangavaram Port : Location Location Location

Over the last decade, 30 km off the coast of Visakhapatnam, the outline of a vast infrastructure project has taken shape. Gangavaram Port has emerged as a prominent minor port on India’s eastern coast. Its 60 million tonnes in installed capacity is more than half of the 110 million tonnes that Kandla Port, the country’s largest handled last year; it is now rapidly scaling up.

At the several terminals of Gangavaram Port, ships laden with coal, limestone and fertilisers deposit their cargo without any of the delays associated with larger Indian ports. A dedicated railway line connected to the Howrah-Chennai route ensures that the cargo  reaches end customers quickly; finished steel makes up its main export.

It’s one of India’s few private sector port success stories and is testament to how a methodically built business backed by patient capital can generate significant returns for investors.  It was in 2003 that Raju secured a concession from the Andhra Pradesh government to develop a deep water port at Gangavaram. The location, with its deep draught, provided a unique advantage. Once developed, large ships of up to 200,000 dead weight tonnage (DWT) could enter and exit the harbour. This meant that large customers like the Vizag Steel Plant could import coal on larger ships, thus reducing the per-tonne cost, while the port could charge higher docking charges for the ships. The port also ensured that there were enough berths available round the clock, and marketed the fact that ships don’t have to wait.

In a short period of time Gangavaram Port was able to draw away significant business from the nearby Visakhapatnam Port that is run by the central government. The port also has a natural monopoly, as Kakinada Port is too far south.

According to an analyst who tracks port companies, Gangavaram Port benefited significantly due to the inability of domestic coal production to keep pace with demand in the last five years. He pointed out how little control port companies have over the pace of growth in cargo. The only areas they can control are making sure that vessel operators are served promptly and capacity is expanded ahead of demand. The next round of capacity expansion will probably include an LNG terminal to cater to the growing gas imports to cater to city gas distribution companies.

At present, coal imports comprise 63 percent of cargo handled and a decline in imports could pose a risk. Total imports of all types of cargo rose by 25.78 million tonnes in FY18 to 15.08 tonnes in the first half of FY19. Revenues for FY18 rose 29.6 percent to ₹812 crore, while profit after tax rose 196 percent to ₹269.56 crore. The company has been able to prepay its loans out of internal accruals.

 

What are APIs in Freight and Logistics? Everything You Need to Know

What are APIs in Freight and Logistics? Everything You Need to Know

APIs changed the E-commerce landscape. API integrations digitally automate processes and data across applications to make the flow of information for businesses and customers seamless and instantaneous.

Since Salesforce launched the first widely acknowledged API in 2000, APIs have proliferated to revolutionize how we do business.

From Facebook Messenger, PayPal payment options, to booking a holiday online, you’ve likely used APIs without even realizing it. That’s how fundamental they are to eCommerce and the development and dissemination of information on Web 2.0.

“What are APIs in shipping?”

What are Shipping APIs in Freight and Logistics?

API is an acronym that stands for Application Programming Interface. APIs are generally cloud-based intermediaries that allow applications with different designs and code to exchange data and information with each other.

While there are standard industry integrations that make it easier to share data and information, there are still many Transport Management Systems (TMS) that are independently built in-house.

This presents a challenge as both proprietary and in-house systems aren’t usually built to exchange data. This presents a logistical problem, particularly globally, where big data can be overwhelming for businesses with manual processes.

APIs act as an intermediary between systems to allow them to communicate between businesses and their customers.

How do Ocean Freight and Logistic APIs Work?

APIs are middle-men between applications that are unable to speak to each other.

According to MuleSoft, an easy way to imagine how APIs operate is to think about them as a bilingual waitstaff in a restaurant.

There are customers, a cashier, and chefs. All are independent of each other, and to ensure effective communication between all these parties, waitstaff is required.

Let’s also add another element to this analogy and say all parties speak different languages, and only the waitstaff can speak all three languages.

Waitstaff can communicate orders between customers and chefs, deliver the food, communicate the meal cost, and transact money.

This is essentially how an API operates. They speak the various languages needed to communicate between applications, and what are the correct actions needed to deliver data and a meaningful user-experience.

Without this core element in eCommerce, business would grind to a snail’s pace.

Just like the waitstaff analogy, the  API is the middle-man between customers, freight forwarders, NVOs, carriers, and third-party logistics providers through the Freight Commerce Platform.

The API allows shipper TMS’s to communicate directly with ocean carriers and other partners in shipping. Integration with the Freight Commerce Platform also offers visual displays of real-time data directly from carriers in a user-friendly manner.

Advantages of APIs for Freight and Logistics

Now that we've established that APIs connect business applications, you still might be wondering what the advantages of using APIs for your shipping business are. BBVA outlines some benefits of APIs, and they include:

Automation - APIs create automated workflows that mostly eliminate the need for manual input

Customization - APIs can be personalized to create custom user experiences to match customer expectations

Embedding Functions - APIs can embed content on any website more easily providing a better user experience

Adaptation - APIs have a lot of flexibility to be updated as organizations and processes change

What’s the Difference Between APIs and EDIs in Shipping?

Before jumping into what these two forms of electronic exchanges are, let’s first breakdown what they stand for:

API - Application Programming Interface

EDI - Electronic Data Interchange

First, EDIs and APIs are both used to electronically exchange data and information between enterprises in Shipping. The first commercially used EDI was established in 1975, and shippers, freight forwarders, NVOCCs, ocean carriers, and 3PL providers all utilize them.

While both EDIs and APIs serve the purpose of exchanging data, there are differences between their applications.

EDIs can only transmit data with formats such as ANSI, EDIFACT, TRADACOMS, VDA, XML, or UBL. However, APIs can transmit data between systems and do not need to change their data format, like EDIs, to transmit information

EDIs may not be available for small to medium-size businesses as the cost and time to implement them is significant, while APIs are generally fast and cheaper

EDIs are slowly becoming obsolete and will eventually be replaced with APIs as they’re easier to implement, maintain, and update

Another important difference is that despite APIs being web applications that act as middle-men, they're often marketed as products. API customizability gives businesses the ability to turn something as slow and inefficient as sharing PDFs and Excel documents into a meaningful real-time process that can be viewed instantly online.

EDIs, as useful as they are now, will probably hold you back from realizing your company’s potential to digitalize operations for greater success.

Example of Ocean Shipping API

A contract management solution can use APIs in shipping. These APIs act as aggregators for ocean carrier rates, inventories, and schedules and present all this data to shippers and freight forwarders.

Shippers and BCOs - By connecting their TMS with an API, such as the BlueX Rate Management System, Shippers, and BCOs can directly review rates and book shipments with ocean carriers

Freight Forwarders - These APIs can provide forwarders with customer spot and contract rates in real-time, allowing them to book freight more efficiently in less time

Ocean Carriers - Carriers can instantly relay spot and contract rates and inventory and schedules, without the need for manual data entry, which can delay the dissemination of updates

What to Consider When Designing an API

With so many APIs in the marketplace and industry, simply offering your integration to customers and businesses might not be enough.

While the ocean freight industry was slow to adopt APIs, it won’t be long until enterprises figure out that they can market and treat their API as a product instead of just integrations.

According to IBM, there are three considerations you should think about when designing an API.

API Branding and Positioning - Enterprises need to consider the technical experience of the developers they market to and what their end-user experience wants. Positioning the branding with this in mind is essential

API Awareness Promotions Strategy - With so many competing API solutions in the market, raising awareness among developers is essential for your API's success

Nurture API Lifecycles - You should consistently enhance your service level agreements and testing environments with version upgrades, support, and other operations as your API matures along its life cycle

A final consideration is also to review Digital Container Shipping Association (DCSA) definitions for open source API development. These definitions can aid enterprise APIs to be DCSA standard-compliant in tracking and tracing on for customers.

APIs are what drive online ecosystems. Without them, connecting applications and services would be a nightmare. While EDIs have served their purpose well since the 1970s, freight and logistic APIs in ocean shipping offer an experience to streamline and innovate how we all do business.

How To Use Digital Marketing in Logistics

The internet is burgeoning with information on the power of B2B digital marketing, but most logistics companies are neglecting to invest in their digital presence. The irony is that logistics is the perfect industry in which digital marketing (done right) can grow your business, for 2 reasons:

1. Customer relationships rely heavily on trust. Digital marketing helps build trust!

2. Digital marketing gives you an opportunity to set yourself above the competition by establishing your expertise.

A recent analysis of the websites of 20 randomly selected logistics firms revealed:

Only 35% had mobile optimized websites, and less than half even had basic web analytics installed on their site. In addition, our research indicates fewer than 5% of Florida logistics companies are using marketing automation or retargeting advertisements.

Digital Marketing Strategies Used by Logistics Companies

Logistics, supply chain, and transportation industries have historically relied on relationship-based selling to grow their business. But when you don’t have established relationships, how do you grow your business?

This is where logistics marketing strategies come in. Utilizing software such as CRMs, Marketing Automation, or Audience Targeting to build and grow relationships with potential (and current) customers can help grow your business more sustainably than current practices.

The lag in investment in online marketing by logistics businesses creates an opportunity for your organization to use these tactics to get ahead of the competition.

We will go through 3 types of software you can implement to get your brand in front of the right audience before they make a decision as well as how they can be used to align marketing with sales.

CRM Software

Customer Relationship Management (CRM) software helps businesses manage future and current customer data and interactions. In other words, it helps you understand who your customers are and how they interact with your organization.

For a potential customer to choose you to carry their cargo, they need to know they can trust you. This means your team is going to need to build a relationship with that prospect.

Members of your sales team can use information in a CRM to have personalized conversations with contacts based on their previous interactions with the company, increasing the likelihood of closing deals with prospects in the future.

CRM software also supports company growth by automating manual data entry and outlining clear processes for following up with contacts.

Some warehouse management systems (WMS) include a basic CRM. This can be a viable solution. Its recommended that you check if the provided CRM software automates your processes, connects to your marketing activities and, ideally, is cloud-based.

Marketing Automation Software

The Survey of 20 randomly selected logistics firms indicate fewer than 5% use marketing automation software.

Marketing automation can automate repetitive marketing activities such as email, social media, and website activities. If used correctly, it can help build and reinforce relationships with leads and customers.

In a study, 84% of respondents cited increased lead generation as a key benefit of marketing automation, while 73% cited better prospect and lead insight, as well as increased efficiency.

Marketing Automation and CRM are sometimes conflated as the same thing because most marketing automation software includes a CRM component.

While its recommended integrating your marketing automation and CRM software, they are two completely separate entities. But, it is important to keep data in sync so marketing and sales teams are on the same page in regard to a prospect’s activities.

By integrating marketing automation and CRM, you’re a creating a single, unified funnel for interactions with prospects. Here is an example from HubSpot, a leader in the digital marketing industry:

Marketing & Sales Funnel

Source: HubSpot

Marketing automation is at the top of the funnel, bringing in new leads while simultaneously working with sales to qualify and nurture those relationships into customers.

Online Ad & Audience Targeting Software

The final piece to the puzzle is online audience targeting and advertising software known as programmatic advertising. While CRM and marketing automation nurture contacts and prospects, programmatic advertising uses software to promote your brand and obtain those prospects.

Programmatic ad buying opens the doors for logistics organizations to target their audience online. One way to ensure your ads are reaching your target audience is through behavioral targeting.

Behavioral targeting allows you to show your ads to people online based on their job title, industry, purchasing behavior, geographic location, age range, etc. Instead of buying advertising on one website at a time, behavioral targeting lets you buy advertising on thousands of websites but only show that advertising to individuals who match your target audience.

Another method of programmatic ad buying is retargeting. Retargeting allows you to put your online advertising in front of only the people who have already visited your website but did not inquire on your services.

A recent article in Entrepreneur titled “The Web’s Most Effective Ads” describes retargeting as technologies “online entrepreneurs cannot afford to overlook.” And according to our research, fewer than 5% of logistics companies are using them.

To Sum it up

One fact is abundantly clear: logistics businesses obtain (and retain) customers through relationships built on trust. If they can’t trust you, they won’t use you. And while these 3 tactics may only comprise a small portion of the ways digital marketing can help you build that trust, they are invaluable first steps in logistics marketing. With the right synchronized technology, your integrated sales and marketing efforts will be prepared to scale as your logistics company grows from your marketing efforts.

All About the Indispensable PALLET

 

The foundation of bulk global shipping is quite simple — it’s all about the pallet. This stable, flat transport structure is topped with packaged goods that are secured by shrink wrap or straps. Pallets are lifted by forklift, front loader or crane, stacked neatly and then loaded onto trucks, trains, cargo ships, or airplanes for their global journey to market.

In fact, nearly two billion pallets are used every year in the U.S. to efficiently transport goods. Certainly, they facilitate the ease of transport — getting goods from Point A to Point B on schedule. But they also help preserve the integrity and high quality of goods being shipped. That’s important for all goods, but most critically for pharmaceuticals, given that any missteps could jeopardize the integrity of the entire shipment.
Pallets are a booming business. EMR’s research shows that the burgeoning global pallet market was valued at $82.59 billion in 2020 and will soar to nearly $115.17 billion by 2026. The use of pallets cuts loading time, enhances safety for workers, improves transport efficiency, and protects products.
High-quality pallets are the linchpins for safely, efficiently moving everything from pharmaceuticals to fresh produce, machinery, chemicals, construction materials, and consumer goods to market.
 
2022 Pallet Challenges
That said, significant pallet challenges emerged throughout 2020 and 2021 and have carried into 2022. Most onerous? It’s the continuing shortage of pallets, which, in turn, is driving up pallet pricing. Shortages of new pallets – mostly made of wood — are attributable to everything from business labor woes and high lumber costs, to increases in new housing construction, an increase in consumer do-it-yourself projects, forest fires that cut down on logging efforts, and renewed lumber demand from overseas markets, among several other reasons.
Sometimes, big distribution centers and major retailers also get first dibs on new pallets, which can impact supply availability for other customers.  In addition, the rate of new pallet production simply isn’t keeping up with demand, and at the same time, fewer pallet “cores” or used pallets are available for sale.
Despite the litany of challenges, we remain committed to helping our clients navigate through the current minefield of pallet shortages. We know that logistics managers within our clients’ companies have enough stressors to deal with in 2022 – everything from escalating prices for materials to product scarcity, delivery delays and increased client demand.” With all that in mind, Onofre offers a few “best practices tips” as regards to the pallet world in 2022.
 
Best Business Practices
Tip 1: Logistics managers must carefully assess their pallet quantity needs and communicate about those to their pallet supplier well in advance. “Last minute” is often no longer an option as it was several years ago. Plenty of advance notice during this era means that our customers will have the best chance of receiving the number of pallets they requested.
In addition, significant advance notice can help assure the size of pallets received remains consistent. That’s important for protecting cargo from external damage. For example, if pallets are inconsistent size-wise, the entire shipment could suffer with gradual damage along the edges and corners of the stack of boxes.

For some products, even minor damage to the overall packing material is often considered as full-fledged damage to the entire shipment, even if the material within is untouched,

Tip 2: Be aware that new technology has created some new options for pallets. While an estimated 95 percent of all pallets are wood, plastic pallets and other choices exist too. Some wooden pallets may have protruding nails that can create the potential for punctures. Clients know that some products being shipped including pharmaceuticals or chemicals have ingredients that could prove harmful if exposed to air, so consider the use of new-technology plastic pallets as a possible option, depending on your specific shipment.

Tip 3: Be loyal when it comes to your pallet supplier. Focus on fostering a long-term relationship. Remember that any supplier’s challenges are exacerbated when customers make major, last-minute changes or when a client threatens to buy from a competing supplier to save a few pennies. Those tactics often fail to achieve the desired result. Treat pallet suppliers as you’d wish to be treated. Build a superb business relationship to protect the quality of your shipping materials’ supply chain.
 
Navigating through 2022
Pallet makers continue to be plagued by a lack of materials such as the wood for planks or steel for nails, as well as lack of workers at times. That’s caused supply chain shortages resulting in pricing spikes of several hundred percent. Sometimes the pallets (much as with storage cargo containers over the past two years) are simply located in the wrong part of the world to satisfy customer demand.
Rising prices for pallets is the reality. Solutions to hold the line on price increase include buying in bulk from pallet manufacturers. But the reality is that costs are soaring. Unfortunately, demand is currently exceeding supply. That may continue for several years.

Still, the global pallet market is expected to grow at a compound annual rate of about 5.4 percent between 2022 through 2027, according to EMR research. Pricing and availability will hopefully stabilize over time. 

Once, pallets were simply a corporate after-thought. They were also plentiful in supply. Today, they are sometimes in short supply yet remain a vital resource needed for supply chain integrity. 

Since pallets ‘rule’ the bulk shipping world, working with a logistics firm such as Transmarine Group that knows how to navigate the current marketplace challenges is vital. Our goal is to get your goods into the hands of consumers in a timely manner – which we know is so important for your business. 

Meet The Black Swan : An advanced cargo UAV pushing the limits in Airfreight

Like black swans, the ability to fly cargo at the cost of road freight has long been considered impossible to exist. But with the unveiling of an advanced drone - The Black Swan from Dronamics pushes the limit of what’s possible in airfreight. 

Dronamics, a developer and operator of large cargo has to launched its Black Swan unmanned plane that can fly cargo at the cost of road freight.

Said a spokesperson: “Deceptively simple, the Black Swan isn’t just another UAV, it’s a whole new class of aircraft. “Able to carry up to 350 kg of cargo at a distance of up to 2,500 km at up to 80% lower cost than any aircraft in existence, the Black Swan can operate from runways as short as 400 meters, unpaved, and will enable Dronamics to serve customers in even the smallest and most remote communities, ushering in a whole new era in fast, affordable airfreight for the whole world.”

The company said that operators will no longer be forced to choose between low-cost road freight that can take days to deliver or fast air freight that is ever so expensive, adding that same day, affordable airfreight is finally here.

Svilen Rangelov, Dronamics co-founder and chief executive, said: “The unveiling of the Black Swan represents a critical milestone in the company’s mission to enable same-day shipping for everyone everywhere.

“The years of hard work are paying off and as soon as we’re done with our extensive test program and obtain certification in 2022, we are going to begin commercial operations, serving customers in Europe and beyond years ahead of everyone else.”

Konstantin Rangelov, Dronamics co-founder and CTO, said: “For more than 100 years people have designed airplanes for humans first, meaning they were never really optimized for cargo, and in fact, they’re quite inefficient.

“By being extremely focused solely on carrying cargo, we were able to develop an aircraft that is able to do the job at up to 80% lower cost than any other airplane, meaning we can bring the benefits of aviation to billions of people around the world who do not get regular air service.”

Dronamics plans to roll out a global network of droneports, allowing the Black Swan to provide the missing “middle mile” in airfreight.  Added the spokesperson: “Whether ferrying vital supplies between islands or delivering critical spare parts deep into a country, Dronamics will link towns and cities around the world with each other in a way simply never possible before.

“Able to run on 100% sustainable aviation fuel, it will do so in a more environmentally friendly manner than any previous aircraft in existence, enabling global partners like DHL and Hellmann Logistics to not only serve their customers in the fastest way possible, but also in the greenest one as well.”