In July, ocean shipping price volatility has worsened, primarily due to port congestion in Southeast Asia and an equipment shortage from the Red Sea crisis. As a result, spot rates have surged on all major trade lanes. In contrast, air rates have remained relatively stable, with only a moderate rise. Meanwhile, domestic freight demand remains sluggish, with both trucking and warehouse space seeing soft demand.
Long-term, shippers will continue to face supply chain disruptions that test their resiliency. Geopolitical developments, trade shifts, and fluctuating volume and demand are forcing shippers to develop new strategies, including the acceleration of nearshoring efforts. To mitigate ongoing international and domestic disruptions, shippers must prioritize flexibility in the face of fluctuating conditions. Internationally, port congestion and vessel diversions due to attacks in the Red Sea persist, continue to cause delays, equipment shortages, and high price volatility on major trade lanes. Looking ahead, the International Longshoremen's Association is warning of a potential strike during the Q4 North American East Coast port contract renewal, which may lead to further disruptions.
Click here to access this month's full update.
Highlights from this month's update:
- Ocean rates surged significantly in July due to port congestion in Southeast Asia and diversions in the Red Sea
- Over-the-road carriers are facing heightened pricing pressure due to persistent overcapacity in the trucking market.
- Air demand remains elevated with moderate gain in rates
- The North American rail industry continues to experience heightened tension with unions
- Parcel carriers have recently announced rate increases in fuel surcharge and mailing services
- Warehousing rates and vacancy rates have stabilized amidst reduced demand and recessionary concerns.
- Nearshoring, particularly the China+1 strategy, emphasizes trade routes to and from Mexico, India, and Vietnam for North American and European cargo.
Further reading: You can't scroll too far these days without bumping into articles about the transformative capabilities of Generative AI. Our sourcing and procurement experts have taken a very practical look at the use of GenAI in supply chain operations. While we know that AI has been a key part of supply chain management for years, GenAI has the ability to churn through vast amounts of unstructured data to reshape supply chain management capabilities in an ever-changing landscape. You can read their overview here.
Originally published by Linkedin
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.