The air freight market can be incredibly volatile, particularly when temperature-controlled cargo like pharmaceuticals is included. Between capacity issues, volatile spot-market negotiations and unmet equipment needs, disruptions are something pharma shippers have learned to expect.
Throw in the challenge of attempting to benchmark rates, assess capacity and get the best value for your highly-demanded cargo amidst a looming recession, and suddenly the entire procurement process begins to feel like guesswork.
Supply Chain on the Brain
In an industry where demand is difficult to predict, pharma companies have an advantage that their peers could only dream of: enough time to get their supply chain right. When the market shifts and your products are needed, it can be a costly mistake – $230M, to be precise – to not make changes to your procurement that ensure demand is met.
But how do you do that when there are disruptions around every corner?
Everyone knows that the secret to good, clean fun is good, clean data (you knew that, right?). But not all data is created equal, which is why it’s so important to rely only on data that’s accurate and as real-time as possible. Xeneta data is sourced from shipping companies that move all types of ocean and air cargo across hundreds of lanes, all around the world. After our customers upload their freight rates — 300M+ of them to be exact — the data is validated, normalized and cleansed to become the beautiful analytics that, in turn, empower our customers' procurement. If that doesn’t spell good, clean fun, we don’t know what does.
What kinds of disruptions can the right data help you avoid?
Trade Disputes
Number one on a very long list of unpredictable disruptions is trade disputes. In a global industry where your cargo is shipped all over the world, an issue on even one trade lane can be catastrophic to your bottom line.
The answer here is to divide and conquer.
If you’re continually using the same provider for the same trade lane, you’re not only leaving yourself open to being taken advantage of price-wise, but your cargo is then a sitting duck in any dispute. One issue and you’re facing the loss of time, money, efficiency and valuable perishable goods.
Xeneta Air Freight Advanced (AFA) gives you the ammunition you need to mitigate common issues and get your cargo where and when it needs to be, at the right price. With data from multiple global temperature-controlled freight shippers, you can gauge the past, present and future of your most important trade lanes.
See how your current air freight rates for a particular corridor compare to the rest of the market on a weekly, monthly and quarterly basis. By doing this and evaluating your position in the market, you can approach several different carriers and diversify your shipping routes to balance getting the best price while also prioritizing deliverability.
Further, the historical data allows you to see how each corridor is trending and where future savings opportunities may lie. The historical data can help indicate whether you should start shipping your cargo now, or if it would be more cost-effective to hold off.
High Demand and Low Capacity
The pandemic taught us that when it rains in the pharma industry, it absolutely pours. When your product is suddenly in demand, you’re going to need to ship a lot of it – and fast. The problem is that your cargo is specialized, and temperature-controlled air freight capacity fills up fast. If you’re not on top of the market, you could end up paying extortionate rates just to get your cargo on the plane.
When you have access to vital metrics like capacity, load factor, volume and weight, you can enter into negotiations with a full understanding of the market on your side. Are you paying a premium because there’s truly no capacity, or is it because that’s what they can get away with charging you when you’re in a rush?
Knowing whether the rates you’re being offered are in-line with the true state of the market is invaluable and can help you identify which contract length is most beneficial.
Market Booms
Every once in a while, specific corridors will see a huge spike in activity. Whether it’s due to a global pandemic or a ship stuck in a canal, ocean and air freight are susceptible to big changes that no one can see coming.
The good news is, pharma companies can still come out on top. By using the latest technology, staying up-to-date on market trends and keeping an eye on future predictions, your procurement strategy should have the ability to be both robust and nimble.
Implementing new tech and changing processes is something many shippers aim to avoid, but this leaves them wide open to being blindsided by disruptions.
By integrating the right data into your procurement strategy, you'll have a backlog of knowledge at your fingertips that helps you make quick, accurate and cost-effective decisions and keep a pulse on what you should be paying.
Tap Into the Power of Data
Leverage the right data to improve your temperature-controlled freight procurement — see how with this free spend analysis.
