Just a few days ago, we were working on an article about rising ocean freight rates; but today we’re happy to report that we expect rates to drop on July 15th instead. Not by much, but even the fact that they aren’t likely to increase is a huge improvement, and even a small drop means that the bubble has burst and rates should start heading back down.
If that happens, it will set up a great environment for lower rates heading into the holiday shipping season, giving importers a much-needed boost in an already tough competitive and economic environment.
So what should you do now? If you don’t need to move inventory immediately, consider asking your freight forwarder if you should wait a week or so to book your containers.
We’re still having a lot of conversations about the possibility of shipping into the West Coast instead, where lower ocean cargo rates, even if it means higher trucking costs, may mean lower overall costs for your inventory.
Other industry events may also impact importers, such as a potential strike among dockworkers on the East Coast. The International Longshoremen’s Association (ILA) has a major contract up for renewal in September, and many industry experts believe a strike may occur leading up to the renewal. This could mean delays and longer transit times heading into the holiday season, so booking early to ensure you have space on a vessel is important. The potential for a strike on the East Coast may also make shipping to the West Coast more appealing.
With prices increasing and booking space limited, carriers are bringing new vessels online. However, more vessels are just one part of the overall system, and those vessels still need space at dock, available dockworkers, customs officials, and more. There’s an increased chance of various delays, because extra vessels coming in doesn’t solve the whole problem. It’s always a good practice to diversify, spreading multi-container shipments across different vessels so that if one is delayed, you still have inventory available. We were recently reminded of how important this approach is, even in the face of limited space, when a customer’s whole inventory was tied up on a single vessel.
By staying ahead of these challenges with strategic planning and our expert guidance, your business can maintain stability and competitiveness during these uncertain times.
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