Tuesday, July 16, 2024
HomeBusiness21st Century ChallengesThe State of the Supply Chain in 2024 and How Software Can...

The State of the Supply Chain in 2024 and How Software Can Help Minimize Rising Costs

Around this time last year, it appeared as though the “normalization” of the supply chain was set to continue post-Covid.

However, since the Houthi attacks in the Red Sea began in October 2023, geopolitical tensions and operational disruptions have caused freight rates to further their climb. More than sixty vessels have been targeted by rebels through missile and drone strikes. These hostile activities along the Red Sea and the Gulf of Aden have led to the death of four sailors. One ship has been seized and two others have sunk. This has forced carriers to divert ships and seek alternative routes, leading to increased costs.

U.S. import volumes have been robust, and this year’s peak season came sooner than expected. Retailers have been restocking after strong post-pandemic sales and preparing for the increased tariffs on Chinese goods that will take effect in August. Hackett Associates, who generates monthly reports for the National Retail Federation, expects the amount of imports will surpass two million TEUs for seven consecutive months. The two million TEU mark is significant, only being reached twice since October 2022.

There is an imbalance in container positioning and schedule rotations, creating a domino effect in overall supply chains.

In May, Singapore had 450,000 TEUs in a queue with vessels waiting up to seven days at the terminal for berth. According to maritime data firm Linerlytica, global port congestion has hit an 18-month peak, with 60% of ships waiting at anchor situated in Asia. By mid-June, vessels with a combined capacity of over 2.4 million TEUs anchored waiting to dock.

In the short term, disruptions in the Red Sea are expected to persist, continuing to impact shipping schedules and freight rates. In the Asia-U.S. headhaul market, carriers have steadily increased spot rates, with a few carriers imposing a $2,000 GRI effective on July 1st. We are now surpassing the $10,000/FEU mark, halfway to the all-time high rates during the peak of the pandemic.

As container availability and space issues persist, we welcome the opportunity to help our clients manage their shipments from one single platform: the MTS Logistics Supply Chain Suite software.

From MTS Logistics’s dashboard, customers can view multiple carrier options and select the most suitable rate and sailing schedule. This includes the capabilities for real-time tracking and increased collaboration – between shippers, consignee, and the forwarder – to effectively interact with each other for each shipment.

By leveraging our Purchase Order Management System, businesses can have a dedicated team to help create integrated solutions. You may learn more about our Supply Chain software here.

Marc Holder
Marc Holderhttps://www.mts-logistics.com
Marc has a degree in Business Management from the University of Texas at Dallas. He began his career in 2013 at Evergreen Shipping, where he worked as a Vessel Coordinator, gaining expertise in ocean shipping. Transitioning to the U.S. Imports/Exports sales team in the Gulf Region, Marc showcased dedication and industry knowledge. Since September 2019, he has worked at MTS Logistics as a Sales Executive. He was recently appointed as Vice President of Sales, a recognition of his leadership and commitment to customer service. In his free time, Marc enjoys outdoor activities with his family, hiking, and playing basketball.

Latest News