Keep the wheel rolling

Sep 22, 2021 | Corporate news

STARCO’s strategy amidst the global container crisis

Freight shipping has been in an unprecedented situation for well over a year.

The worldwide spread of the pandemic continues to be causing critical disruptions in supply chain globally. Since the beginning of the outbreak, several lockdowns in Asia, India, USA and Europe slowed down the production in factories, resulting in containers piled up at ports and a reduced number of vessels, leaving the rest overloaded. The situation triggered a race of booking available cargo and the carriers started to announce blank sailing (when a vessel either skips ports or an entire string is cancelled).

Shipping time across continents suddenly doubled, as well as the turnaround at ports globally. In consequence, freight rates began to rise in the middle of 2020 and have not stopped ever since. (See the dramatic development illustrated according to the Shanghai Freight Index below and read more here.)

 

Source: https://container-news.com/scfi/ 

 

Furthermore, the 21st century’s Suez Crisis, the infamous case of the Ever Given in March this year was just the tip of the iceberg…

We are KENDA

As part of the KENDA Group, we at STARCO have the advantage of being the manufacturer which means we are in full control of orders and supply. We only rely on a few key external suppliers with stable and long-term contracts. Our European footprint is strong; with a steel wheel factory in Croatia and a specialty wheel and tyre factory in England, we are in a prominent position to be able to serve our clients.

What’s more, having a widespread operations and warehouse network across Europe allows us to plan and utilise capacity between our locations from Belgium through Germany to Poland.

However, part of our supply chain relies heavily on KENDA’s tyre factories in many Asian countries as well as our own steel wheel factory in China. Therefore, the container crisis has unfortunately also affected our daily operations.

We deliver!

From day one, STARCO’s strategy has been clear: prioritising delivery. Our operations team took the first opportunity to book capacity with our suppliers at the very beginning and kept close contact with freight forwarders. Our customer care and sales managers across Europe have prioritised constant and transparent communication with clients.

Our operations teams are tirelessly looking into alternatives, also when it comes to means of transportation. STARCO has gone as far as putting a container on a truck that drove from China all the way to Poland – after any other option proved to fail.

An unpredictable outlook

The situation, however, is as unpredictable as ever and it does not seem to improve in the foreseeable future. Container prices have been surging and shipping rates are at record highs at the moment.

If we look at container availability, capacity is limited while there is currently a historically high demand for shipping space. Ports in Europe and the rest of the world are massively congested and lead times are sky-high.

It is, of course, not only our business that’s affected. Retail in general is facing serious problems globally and we all are in the same boat, from business owners to consumers. It’s already all over the news that we are going to see the biggest impact of shortages on Black Friday and Christmas this year. No matter what kind of goods or industry we are talking about, the situation is without a question critical and the pressure is high.

STARCO is there for its customers

STARCO and its entire customer care, operations and sales team are there to ensure the best possible service to our customers. We analyse forecasts daily, fight for the best rates and are in tight contact with suppliers as well as forwarders to coordinate containers. We do our utmost to supply on time and provide consistent updates to our customers. It’s our collective interest to keep the wheel rolling.

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