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As the logistics industry tries to find balance in a post-pandemic world, the rate fluctuations after a lengthy period of skyrocketing costs and disruption should be expected. With the pendulum swinging backwards, driving rates down and overloading the market with capacity, there might be the desire to capitalize on obnoxiously cheap services, despite warnings of complications and equipment instability. In any race to the bottom, there is the danger of nefarious parties entering the market to take advantage of people who expect the absolute lowest prices but aren’t aware of the danger in using a problematic company. 


The main issue will be shippers locking in long-term low rates and then being unable to secure bookings or equipment when rates go up later. Those who are looking to capitalize on the rate spike are likely to avoid giving space to those who are contracted under market when they can spot out the space at a massive profit. It’s wrong, it’s dangerous, and it unfortunately happens to unsuspecting shippers. 


Not every response to low rates involves lying to get business. One way carriers lower their capacity is to blank sailings, where they skip entire ports as there aren’t enough containers going in or coming out to warrant frequent trips. Another that’s in the news currently is slow steaming. The process of sailing slower, taking longer routes around the continents instead of through bypasses like the Panama or Suez Canal, saves greatly on fuel and takes longer, further spacing out the frequency of port calls. 


Drought issues in Central America have led to a reduction in the water level, meaning that to safely pass through, ships must reduce their maximum loads by 40% as the draught level drops to 44 feet. This makes bypassing the Panama Canal and going around the tip of South America a more attractive option. 


Now is the time to ensure you have a trusted logistics partner working in your corner. At Coppersmith, we have eight decades of experience, understanding, and relationships built on a solid reputation of outstanding customer service and transparency. We understand that there is a lot of doubt and uncertainty, but our experts are on deck to help answer your questions, alleviate your fears, and protect your cargo from disruption. If you want to feel the difference it makes when you work with an established company with an impeccable reputation, contact your Coppersmith representative. 

Bud Coppersmith

Author Bud Coppersmith

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