Looking into 2017, markets anticipated U.S. containerized imports to jump approximately 6.0% up, compared to last year, and reach a new peak of 21.8 million TEUs, mainly on strong consumer demand.
Northeast Asia contributed most to the import trade, adding 1.91% to growth, followed by Southeast Asia which contributed 1.02% to growth. China continued to be the largest supplier of containerized goods to the U.S., accounting for 46.8 percent of the total U.S. inbound trade.
In this atmosphere, I believe it is critical to focus on utmost time and cost efficiency, when moving freight into the U.S., and take proactive steps to avoid disruptions.
Shippers should take a few proactive steps in order to avoid any disruptions.
Early placement of bookings: Shippers should coordinate with overseas partners and encourage early booking placements, as a usual first step. Placing bookings, a week or two before cut-off dates will dramatically prevent space and equipment issues.
Forecasting: Reviewing volume predictions, and providing info to logistics providers for Q3 and Q4, will help them allocate space and equipment in a timely fashion.
Equipment: Maintaining close communication on equipment needs with providers and carriers, and sharing empty pick-up needs with providers, will help better manage equipment flow in a more efficient manner.
Local trucking: Communicating local trucking needs in a timely manner, will allow truckers/suppliers/vendors/booking offices to anticipate challenges locally with the booking/availability of their local trucking services. In case of trucking shortages, it is important to work with a logistics partner that can provide you with alternative trucking options.
How will Q3 and Q4 will play out?
We expect the spot rate market to grow slightly stronger over time in Q3/Q4. Even though overcapacity is still a troubling issue within the industry, carriers have started the year with strong rhetoric on rate increases, and are certainly focusing on revenue increases, to keep their heads above the water.
We expect regular attempts to increase spot market figures throughout 2017. Carriers may implement temporary space cuts on contract businesses, in order to move more profitable cargoes. We may see more cases on roll overs and overbookings in key regions and ports, such as Yantian, Qingdao, Ningbo, and Shanghai.
Recently, various elements such as increased volumes, bad weather, new alliance schedules, and more, have already started causing congestion issues in Asia, particularly northern China, Qingdao, Shanghai, and Ningbo. A rule of thumb is to use a logistics provider who is well-prepared, and can make strategic decisions, to keep shipper’s transportation needs – this is crucial.
Let’s not forget that shippers already have their plates full, and they need a proactive partner to avoid further complications, and to make things easier. They should either spend more on shipping, and less on inventory, storage, returns, and other costs. Here are some things to consider: the decision to ship via ocean versus air, whether consolidation is the right way, or what service offers the optimum transit time. This is where the real and practical value of a good logistics partner comes into play.
MTS Logistics will provide the peace of mind, and the necessary relief, for these concerns discussed above for the remainder of 2017. We believe when people, processes, and technology are leveraged, we can offer the utmost competitive advantages for our customers.