The Forward Movement of Society and Freight

The shipping and freight forwarding industry has marked a permanent impression upon the structure of the global economic environment and is arguably one of the most important functions in society today.

The key elements of a modern economy, health, education, law and order could not be delivered without cost effective transport. So what does the next 12 months look like for the industry? Some say it’s anyone’s guess as we have seen some very strange happenings such as Hanjin going bust in mid operations. The South Korea company, 7th largest in the world, left 97 ships stranded, owing more than $8 billion dollars with an estimated $14 billion cargo floating at sea as the ports would not allow them to dock.

The reason, the ever decreasing margins eroded the viability of the shipping line and the inevitable collapse happened. Thereafter the container rates have increased; however are they sufficiently increased to ensure that another occurrence will not happen again such as the Hajin example? Other factors such as the UK leaving the EU had a marked effect on the economic confidence for a period in 2016. It was predicted that this was the beginning of the end but the UK economy has shown a growth and is becoming stronger. So that leads us back to the question of what can we predict in 2017? Possibly that it is unpredictable!

So we can devise from that, that the industry has adapted and is adaptable, this is a certainty. Changes are also driven by demand as well as margin. The end user being lured by ever shortening delivery times has seen many changes. Technological advances such as drones and driverless vehicles will undoubtedly change the face of the freight forwarding and shipping industry for good. How long this will take is a subject for another article, but one thing is for sure is that the impact will change the supply chain in ways that we may not envisage.

Another attribute of the industry according to Caroline Seear CEO of Red Recruit Global, an international recruitment company that has been supplying staff in the industry since 2002, is that the shipping and freight forwarding industry is the first to indicate that there is a change in consumer confidence. “Shipping and freight forwarding is an economic indicator of the health of the economy in my opinion. It is the backbone of the economy and so when the economy slows down, then the shipping industry sees that slow down, almost in realtime” said Caroline Seear. “If recruitment in the shipping and freight forwarding industry slows down then the rest of the business sectors starts to follow a month or so after. I have seen it many times and a worldwide example that I would point was back in 2008. If the shipping industry sees a downturn in goods being shipped then the freight forwarding companies immediately put a hold or will stop recruiting altogether. As we serve many other industries as well, this follows up the food chain so to speak. Recovery times vary and it’s almost like the braking effect on motorways. At present the current trends are buoyant in the recruitment market in shipping but the corporate sectors, like banking, are very slow.” Caroline further commented “Is this the delayed reaction of the previous slowdown or is this the Brexit effect on banking? Personally I think it’s a combination of both”. “When I say it’s like the braking wave effect on motorways, the different industries are very similar to in their behaviour, the demand for staff follows similar behavioural patterns. A lot of the behavioural patterns are an emotional decision rather than factual in both cases“.

It can also be said that Freight Forwarding’s’ logistical placement in the incredibly influential peripheral of the UK's social and economic environment means that it is of the utmost importance that the industry continuously remains at the top of its game. Whilst the Freight Forwarding industry is liable to constant change and adaptation, it provides a definite and certain tool to the lubricant of international business as well health, education and society as a whole. This cannot be denied and is often overlooked by politicians.

The permanent mark left on the modern economic environment by freight has created an inseparable link between the freight forwarding industry's own conditions and popular movements in society. A spokesman for the port of Belfast comments “Through the port, wider changes in society are also reflected”. As the public's eye turned green, the freight forwarding industry became a huge source of opportunity to reduce humans’ environmental footprint. Unfortunately BIFA have now dropped their Environmental Award, much to the disappointment of Red Recruit Global, who had sponsored the category for many years, and was an issue particularly close to the CEO’s heart. The reason given was that there was no uptake by the industry to enter into the award. Was this caused by the reduction in margins and consumer focus waning in regard to environmental issues? Combined with the consumer wanting more for less at any cost? Whatever the reason, it is a sad indication that the lack of profit cuts the ability of the industry, to find green and sustainable alternatives to current logistic solutions.

Human talent pool and indeed the acquisition of key players in the industry has been another area that has suffered because of the reduction in margins and the uncertain economic outlook. Acquiring key people for a company has become more scientific rather than giving Joe at the freight club a call. Newspaper advertising does not work well and social media is a science that not many shipping companies and freight forwarders have mastered to date. Although networking continues, companies are approaching the whole arena of talent acquisition in a more scientific way and want to look at a bigger gene pool so that they can hire the best. This has led to companies using consultancies more and more, like that of Red Recruit Global, who are proactively networking 24/7 and have a database of over 120,000 industry specific candidates on their books. “At Red, our Consultants are able to have conversations at the highest level and proactively look for candidates that suit our clients’ needs and not that of their own. Recruitment has changed too; we add value wherever we can. We partner our clients and find them the very best candidates out there using diverse strategies” said Sharon Vasili, Manager of the Shipping Team at Red. “We have active social media campaigns, newsletters, advice blogs, job boards and a whole host of ways that we attract candidates. This is our full time job and we have many years experience which means we have refined our knowledge, so only the highest quality candidates are put forward.”

Another trend that has changed and in recent months, is that the companies in the industry are taking apprentices on again. The industry is and has been for some time suffering from a lack of new blood entering into shipping and freight forwarding. This has led to a severe shortage of good candidates for the industry and a lack of management grade candidates in the late 20’s to mid 30’s age range. Yes, there are some but not enough. Sharon Vasili, the Manager of the Shipping Team at Red Recruit Global said “I have sourced a considerable number of younger people over the last 6 months that are now working with my clients. There is a definite change in the industry right now, as many people have come to realise that the gap in the 20 to 30’s age range is impacting on the industry.” Sharon added “We have led the way as we actively have an apprenticeship scheme and over 10% of our workforce are apprentices. They are not only a breath of fresh air into the company but are also the building bricks for the future of the company.” For some years the industry was not proactive in taking on the next generation as trading and margins were drastically reduced. Now with a crisis in talent acquisition there is a driver in place for that change to happen, and it certainly is happening now.

CEO, Caroline Seear says “We are in an ever changing environment and recognise that fact. We have to adapt and be able to demonstrate our value to our Clients and Candidates alike. The industry as we know it now may have changed and the challenges are increasingly complex, however we are here to lead the way and indentify trends for Clients.”

Red are exhibiting at Multimodal on stand 2046, and you are welcome to book an appointment or drop by and take the opportunity to discuss how Red could assist in taking your shipping organisation or career to the next level, with the confidence that comes from using a Consultancy well versed in the industry. Red offers a consultative approach and tailor their service to fit your requirements.