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What Shippers Need to Know About Ocean Shipping Volatility

November 2, 2022

Supply and demand. These two sides of the same coin form the backbone of any economy, and supply chain management play a crucial role in the smooth execution of supply as demand for goods continues to rise. Ocean freight shipping is the primary source of international transportation of these goods. The problem of backlogs and delayed shipments continues to plague the world of ocean shipping even as blockages on the West Coast seem to have lessened. Shippers need to understand a few things about ocean shipping volatility and its role in overall supply chain management.

International Delays Continue to Disrupt Supply Chain Flow

The resurgence of the COVID-19 variant in China has created a shortage of truck shipments to the containers. Still, only time will dictate the fate of delivery logistics management once the Shanghai port reopens. 

It looks like there is no quick solution to this impending challenge. Delay in the delivery of ocean shipments results in a shortage of supply of products. Also, China is a key exporter, and it seems like domestic port activity trends of 2021 are likely to repeat themselves this year.

According to Maritime Executive, “the pressure points are throughout the supply chain. While liner capacity has increased 30 percent on the major trans-Pacific routes and vessel productivity is up 50 percent in the port.” There is also an impending labor strike in late spring on the West Coast, which might fuel this situation. There is a call to increase infrastructure on the West Coast, which stands at ten to one compared to the East Coast investments.

Persistent Ocean Freight Delays Will Likely Continue and Must Be Considered During Logistical Planning

Like never before, there is a need for a reliable ocean liner and intermodal transportation to maintain parts and product inventories. Delivery logistics management managers will be unable to circumvent the latest bottlenecks without real-time visibility into ocean freight. Most supply chain managers lose valuable time in tracking shipments and giving reliable information on the ETA of the ocean shipments. 

This is even more crucial now as ocean freight shipping continues to be more volatile than ever. Tracking freight demand globally, parcel and access to ocean shipments’ containers have become the need of the hour. Tracking container shipments will allow companies to maintain better inventory levels. Drayage is the first step and an integral part of delivery logistics management. Regardless, the trick to ensure all in-land parties know what’s happening and when freight will arrive. 

Disruptions Lessen on West Coast and Worsen on East Coast as Recovery Efforts Continue

On the West Coast the congestion seems to have eased due to the Shanghai lockdown. Ports in Charleston,Savannah, New York, New Jersey and Virginia are reeling under the pressure of vessel backlogs according to JOC.com.

Then there is the impending problem of ocean freight shipping congestion once the lockdown lifts. The liners that are lining up in the ports of Shanghai, Beijing and other Chinese ports will sail off again, creating a sort of ‘traffic jam’ in the ports. Until the infrastructure of the West Coast is improved, this challenge will continue to persist. 

Ocean Freight Shipping Managers Will Continue to Face Rising Rates, Disruptions, and Delays as Market Volatility Continues

Rising inflation, rising cost of fuel have all contributed to the rise of ocean freight rates and thus prices in general, but consumer demand doesnt seem to be abating. Delivery logistics management therefore is crucial to mitigate the challenges that the ocean freight shipping industry is facing. Monthly import rate is on the rise. Demands are only going to rise when the holiday season comes in. Maritime short term contracted rates are on the rise. The average EU-China container rates are expected to rise by triple-digits over the year. China- US rates have already gone up by 102% from last year. 

Ocean Shipping Volatility Continues to be a Major Concern But the Right Industry Partner Can Make All the Difference 

Will demand fall? Will the COVID pandemic end? Will the Russia- Ukraine war end? There are no answers that we can provide to these questions. But given the current challenging situation the ocean freight shipping industry is facing, one can mitigate the challenges by choosing an industry partner who has expertise in real-time ocean shipments tracking. OpenTrack is a great partner if these are the challenges that have to be met and ocean freight shipping needs to be smooth with the imposing challenges the industry is facing. Request a demo of the OpenTrack API and ocean visibility platform today.

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