Ocean Freight

Figuring out how to emerge from this ongoing maelstrom will remain a challenge for shippers everywhere in 2024. With that in mind, let’s focus a few areas around the globe where extra care and diligent logistics management will need to be applied to keep operations—and budgets—in check.

Ocean shipping is again at the mercy of environmental and geopolitical events—and the pessimists are winning over the optimists on the high seas.

Late last week, at the COP28 conference in Dubai, leadership for some of the largest global container shipping lines banded together to issue a joint declaration for an end date for newly-built fossil fuel-powered vessels, while also calling on the International Maritime Organization (IMO) to establish regulatory conditions needed to move on to green fuels to power vessels.

October imports, at 2.64 million TEU (Twenty-Foot Equivalent Units), increased 5% annually, following a 1% annual gain in September. On a year-to-date basis through October, imports are down 11.5%, to 24.02 million TEU.  

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With too many vessels chasing too few cargoes, volumes—and rates—have spiraled downward. Consequently, the ocean lines are scrambling to find ways to prop up profits and remain competitive

World-class service emerges from operational squalls

Truck capacity across all modes is slowing because of slackening demand in both industry and retail freight, leading to murky forecasts for the rest of the year by leading freight analysts. Top freight officials throughout the trucking industry are bracing for a slowdown the second half of the year. Truck demand, buoyed last year by the recovery following the COVID shutdown, returns to a more normal level, they predict.

The latest report says that the era of building supply chains solely around cost-reduction considerations is over. Rather, a new value has taken hold—resilience.

More choppy waters ahead for ocean carriers.

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Research from consultancy Kearney has found that 96% of CEOs are evaluating reshoring their operations, have already done so, or are considering it. That is up from 78% in 2022. That same report also found that American imports of Mexico-manufactured goods have increased from $320 billion pre-pandemic to $402 billion today.

Following a year of record revenue for carriers, shipping analysts see the pendulum swinging in the other direction, as rates are decreasing, volumes are falling, and new capacity is coming online.

Descartes said that U.S. container import volumes saw a 9.0% increase, to 2,020,197 TEU (Twenty-Foot Equivalent Units), from March to April, which topped a 6.9% increase, from February to March. The firm explained that U.S. container import volumes were paced by what it said was a surge in imports from China. Those imports alone posted a 26.7% increase over March.

Logistics Management Group News Editor Jeff Berman recently spoke with Michael Farlekas, CEO of Austin, Texas-based connected supply chain software platform services provider e2open. Farlekas provided Berman with an overview of various topics, including: a return to supply chain normalcy; inventory management, and sourcing options for shippers, among others.