Ava Global Logistics LLP Ensures Timely Delivery Amid Red Sea Crisis

CEO & MD, AVA Global Logistics LLP
By planning shipments at least 15-20 days ahead, operators can ensure timely delivery and secure necessary shipping space.

Darshan Ghodawat - CEO & MD, AVA Global Logistics LLP
 

Increased Transit Time and Higher Freight Costs

The Red Sea crisis has presented several specific challenges to freight operations, including increased transit times and higher freight costs, disrupting usual shipping schedules and stretching logistics budgets. To mitigate these disruptions, operators have taken proactive measures to keep customers informed and plan shipments well in advance. By planning shipments at least 15-20 days ahead, they ensure timely delivery and secure necessary shipping space. This forward planning helps manage freight costs more effectively and maintain good freight filing, ensuring that customers receive their shipments on time despite the ongoing challenges in the region.

Renegotiation of Contracts with Buyers

The Red Sea crisis has had a minimal impact on the cost-effectiveness of Ava Global's logistics operations. However, the situation has significantly affected exporters. Due to the surge in trade, exporters have had to renegotiate their contracts with buyers in the Red Sea region to accommodate increased freight rates. This renegotiation has, in turn, led to higher product costs. To manage these increased expenses, we are working closely with our exporters to provide flexible and efficient logistics solutions that help them navigate fluctuating freight rates and maintain their competitiveness in the market.

Heightened Security Measures

While there have been reports of small events and attacks, the reduced movement of ships on this route has led many operators to reroute through the Cape of Good Hope. However, those operators who still use the Red Sea route implement stringent security measures, such as moving with gunboats, to ensure vessel safety and cargo protection. These heightened security measures increase operational costs, which are passed on to us at Ava Global as forwarders and, ultimately, to the shippers. Despite these challenges, we remain committed to prioritizing the safety of our vessels and cargo, working closely with our partners to mitigate risks and maintain secure logistics operations.

Optimizing Existing Sea Route Logistics

At this time, diversifying our transportation routes and modes to minimize reliance on the Red Sea is challenging due to limited available options. The sea route remains the only viable option that ensures the safety and timely shipment of goods. No operator has explored alternative transportation routes, as the current options do not meet the necessary safety and efficiency standards. We are closely monitoring the situation and will consider alternative routes if they become feasible and can guarantee both safety and timely delivery. For now, our focus remains on optimizing our existing sea route logistics to manage the crisis effectively.

LIFTING & SPECIALIZED TRANSPORT, July - August 2024

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