The buzz out of the Trans-Pacific Maritime (TPM) conference focused on the future of ocean freight logistics under the theme of “picking up the pieces” – a bit of whimsical wordplay about the disruption, inflation, and collapse of ocean freight rates, services, and the uncertain future. Unprecedented volatility was the standard description for the way ocean rates bounced skyward after flawed projections caused carriers early on to blank sailings when they expected lockdowns to keep people out of stores. They weren’t wrong – consumers did stay out of stores, choosing instead to hop online and shop non-stop for months. Advancing eCommerce by over a decade, shoppers spent their entertainment budgets on home goods, home improvements, projects, and craft supplies, as available capacity dwindled to naught, with extra space falling to the massive PPE traffic now moving internationally.
Hindsight being what it is, we could fill pages with details on how things went wrong, got worse, fell apart, and will come back together looking much different, but it remains to be seen where the scales will balance. We’re not in a new cycle; that thinking is flawed and dangerous. We’ve yet to leave the pandemic cycle at all. This deep valley drop in demand is a natural economic turn after the huge inventory orders from 2021 finally found the shelves. Consumers can find services and experiences to spend money on, less frequently required to substitute phone scrolling for movies and concerts. It’s entirely possible that the drop has reached the bottom, but the recovery and where that will leave rates is months away.
Carriers are looking to bolster their rates with extended services, value add-ons, and options to sweeten their offerings and differentiate themselves from competitors. Teetering on the edge of recovery, the US west coast ports are approaching an agreement with the ILWU and PMA labor negotiations. Reducing uncertainty allows shippers to see a complete picture of the cargo situation, letting them choose routings best suited to their freight without concerns about port delays, congestion, and labor issues creating unforeseen problems.
Nobody knows how much disruption is left in ocean shipping. With the most influential thought leaders coming together at TPM, it’s clear that the entire industry is doing the best it can in an unprecedented situation. It’s critical more than ever to have a skilled, knowledgeable logistics partner in your corner. After almost eighty years, Coppersmith has the patience and presence to support your cargo needs through any ocean turbulence. If you’re ready to seize the new opportunities on your horizons, contact your Coppersmith representative today.