LONDON--(BUSINESS WIRE)--According to the latest procurement intelligence report from Technavio, the global deep sea freight market is expected to grow at a CAGR of 4.24% over the next five years due to the rearrangement of global shipping routes.
The research report titled ‘Global Deep Sea Freight Market: Procurement Market Intelligence Report 2017-2021’ provides an in-depth analysis of category spend, best procurement practices and cost saving opportunities, aimed at helping organizations achieve superior business performance. The report also provides insights on pricing, supplier positioning, and top companies, enabling sourcing professionals to improve their competitive advantage through procurement excellence.
“Increasing trade movements, especially in the oil and gas and mining sectors; route optimization; improved intermodal network; the rise in outsourcing of manufacturing to low-cost countries; and high dependence on sea freight as a cost optimized method of shipping are some of the major factors attributing to the growth of deep-sea freight services industry,” says lead Technavio procurement specialist Angad Singh for category spend intelligence. “Both buyers and suppliers focus on major concerns such as regulatory requirements, compliance, supply chain security, and sustainability, apart from the regular aspects such as cost reduction and improvements in the level of services provided,” adds Angad.
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Cost saving opportunities in the global deep sea freight market
The adoption of various cost-optimization levers helps buyers of deep sea freight realize direct cost savings and enhance category management and value benefits (including reduced procurement complexities).
Technavio procurement experts have segmented the cost saving opportunities in the global deep sea freight market into the following value-enhancement opportunities:
- Adoption of technology
- Supplier Competition
- Adoption of negotiation strategies
- Optimization of procurement practices
- Bundling of services
Adoption of technology saving aspects
Mobile applications and web portals help both the suppliers and buyers to filter shipping routes, optimize the terminals and ports, live track cargos using web portals, and navigate through real-time ship movement.
Additionally, the integration of IoT allows various devices used in the supply chain and logistics processes to communicate with each other, enabling real-time transmission of data without human intervention.
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Optimization of procurement practices saving aspects
A growing number of suppliers are investing in the optimization of routes using technology and more efficient sea routes such as Arctic route between China and Europe to reduce the cost and shipping durations.
Also, buyers prefer to engage with service providers that offer robust technological systems and leverage the internet-based systems to reduce costs and simplify visibility across the supply chain.
Bundling of services saving aspects
Buyers need to create a mix of global and regional suppliers to manage supplier engagement risks, seek shipment bundling opportunities, and outsource related activities such as land transport and customs brokerage to expert players.
Suppliers bundle together services such as packing, kitting, light manufacturing, and reverse logistics to help the buyers save up to 13% of the total bundled spend area.
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