In this update, Trent shares highlights from the Trans-Pacific Maritime Conference, exploring where ocean freight rates and reliability stand in 2023.
We’ll discuss how logistics professionals can adapt to current market trends and the changes shaping international shipping.
See our breakdown in the video!
The shipping industry has undergone significant change in recent years, with the pandemic disrupting supply chains in ways no one could have predicted. Recently, Trent shared his experience attending the Trans-Pacific Maritime Conference in Long Beach, California, where discussions centered on the state of international shipping and how businesses are navigating the post-pandemic landscape. Based on his insights, I wanted to highlight some of the key trends shaping the industry and what businesses should focus on as they move forward.
Pandemic’s Effect on Ocean Freight
The shipping industry faced huge disruptions due to the pandemic, particularly with soaring demand, especially in e-commerce, and a massive rise in freight rates. From 2020 to 2021, rates increased by up to 50%, and service reliability dropped. However, we’re starting to see things return to normal. Rates are stabilizing, with predictions that they’ll eventually settle to levels seen in 2019, with minor fluctuations based on market factors.
Current Market Trends
At the conference, industry professionals agreed that rates are on the path to recovery. Companies negotiating contracts should look to 2019 rates as a reliable benchmark for the next 12 months. Service levels are still lagging, with on-time performance at around 50%, well below the historic 75% average. Shipping lines are responding with blank sailings—canceled trips aimed at balancing supply and stabilizing rates—but this could limit availability in the short term.
Focus for Freight Managers
For ocean freight managers, the key priorities are locking in low rates for essential goods while making the most of current spot market rates for less urgent shipments. Strengthening relationships with carriers is crucial to ensure more predictable service. Lastly, preparing for regulatory changes is critical, as new laws are expected to impact the industry.
Make sure to watch the full video for complete insight.
Related articles on this topic have appeared throughout our website, check them out:
- 10 Freight Management Mistakes and How to Avoid Them
- Freight Benchmarking: What Is It? Why Do It?
- 12 Smart Ways to Reduce Your Freight Costs
Editor’s Note: The content of this post was originally published on Logistics Bureau’s website dated May 24, 2023, under the title “Ocean Freight 2023 Update with Trent Morris“.
