Although healthy competition is often welcomed, the less-than-containerload (LCL) volumes sector is currently experiencing renewed competition from seafreight.This situation has arisen due to the steady decrease of ocean freight rates and improvement of services after the significant impact of the Covid pandemic when numerous shippers opted for airfreight. However, with the gradual return to pre-pandemic status quo, both air and ocean operators are vying for these volumes.“There is big competition between air and ocean for LCL volumes,” said Jacob Pretorius, general manager of airfreight at SACO CFR. “With ocean freight rates coming down and the reliability going up, customers are again choosing ocean over the air when it comes to non-time-sensitive cargo. With the world once again in full production, everyone is trying to save as much cost as possible in the supply chain.”Airfreight operators need to make sure they are upping their game. “Our service offerings need to be trusted and stand out giving clients peace of mind. From a business perspective, of course, that SACO CFR needs to be top of mind for our customers at all times.”According to Pretorius, the current buzzword in the industry when it comes to quotes is “turn-around time”. “Clients are under tremendous pressure to provide estimates to their clients about the absolute quickest turn-around times. We have recently restructured our pricing team to be more effective in this regard. “All clients now have a dedicated controller or estimator to do their quotes. We also believe this drives better relationships and accountability.”He said remaining competitive has required out-of-the-box thinking. “The company has set up a control tower in New York in the US to give an overall perspective allowing for a better service and response to clients around the world. “What makes it special from a local point of view is that the person heading up the control tower is a South African. He knows exactly what the local market expects and requires.”SACO CFR was also running promotions for certain blocked space agreements (BSA). “We are very proud in particular of two of our BSA products. The ones out of London and Shanghai are currently on promotion. Both provide reliability in service and rate.”Asked about challenges, Pretorius said the exchange rate to the dollar was a major concern at the moment, especially in the airfreight sector which is highly sensitive to rate changes.“At the moment we are still seeing good volumes. All indications point towards a slowdown towards the end part of the year with ocean rates predicted to be back to the low levels everyone was used to before the pandemic hit. “For the time being, we will keep on offering solutions to our customers that can assist them in offering their customers top service. If we can do this effectively, we believe the volumes will be there.”
