Ocean Sector Shaping the Next Shipageddon
Jan 13, 2021
If you’re a shipper, it’s never good when a rep for an ocean carrier tells you, “You better sit down before you read this.” We’ve been seeing astoundingly high increases in the ocean sector and they seem to have staying power.
While the ocean carriers used blank sailings last year to tip the balance of supply and demand in their favor, right now the demand alone is the driver of heightened ocean rates. This week the Wall Street Journal reported that 1.96 million containers are projected to be imported into U.S. ports this January – the highest number since 2002. Much of this is replenishment of historically low inventory levels.
Once all these containers enter the United States, they’ll need to be picked up and moved to their destination quickly, bringing the truckload market into the challenge. It’s questionable how well the trucking industry will be able to handle this demand on the back of already tight capacity. And while orders have been surging for Class 8 trucks since September, driving schools are still operating well below full capacity.
We often emphasize the importance of being a strategic shipper and times like these underscore why. Although you might not be able to negotiate much lower rates right now, there may be other things you can do to get lower overall transportation costs. To learn more about these, we encourage you to take advantage of our Rapid Assessment.