Week 9 Freight Updates

With increasing logistics automation, trans-Pacific contract limitations, strong European demand for China exports, rising U.S. vaccination efforts, the impact of an improving economy, and millions in sales delays, JOC’s recent virtual TPM 21 experience managed to shed a lot of light on the container shipping industry. Not only can we expect to see rapid advancements in automation in the next 2-5 years, but we can also look forward to stricter two-way commitment contract negotiations, especially in the trans-Pacific.

At this rate, the popular trade lane’s elevated freight costs, ocean freight bottlenecks, and an overwhelming number of shipping accidents are too much for U.S. retailers to handle in the long run given how much they’ve already lost in sales. Even with optimism for the economy to improve later this year, we are expecting any demand produced by an economic recovery to worsen the situation or keep it from returning to normal. This concern is noted in the TPM21 session Improving economy to keep trans-Pac demand robust that we’ve linked to in our update.

To learn more, check out this week’s top industry news:

TPM 21: Logistics automation brings more value to customers

The automation of manual, clerical processes is creating more time for logistics workers to focus on higher-level tasks that add value to the business and its customers, panelists told JOC’s virtual TPM21.

TPM21: Carrier CEOs say trans-Pacific disruptions expose contract limits

The supply chain disruptions of the coronavirus disease 2019 (COVID-19) have highlighted shortcomings in traditional container shipping contracting, with carrier CEOs at JOC’s virtual TPM21 conference calling for more enforceable two-way commitments.

Rates hold as European demand for Chinese goods bucks seasonal trend

Strong European demand for China exports has kept short-term container rates largely unchanged in the weeks after Chinese New Year, a period when prices typically fall as factories close for the holidays.

TPM21: Increasing vaccinations will eventually ease US port congestion

How quickly the backup of containers and freight in US ports diminishes depends on how quickly the US gets the COVID-19 pandemic under control with more people being vaccinated, Nariman Behravesh, chief economist at IHS Markit, said Monday at JOC’s virtual TPM21.

TPM21: Improving economy to keep trans-Pac demand robust

Fueled by fiscal stimulus and an improving economy, US consumers will keep trans-Pacific container shipping buoyant through most of 2021 and give ocean carriers their best pricing power in years, market experts told JOC’s virtual TPM21 Monday.

U.S. Retailers See Millions in Sales Delays Amid Shipping Logjam

Overwhelmed U.S. ports, elevated freight costs and accidents that sent goods plunging to the bottom of the ocean are causing headaches for U.S. retailers already reeling from the pandemic.

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