The Command Center: April News for Shippers
This is a preview of The Command Center, Cargomatic’s newsletter for shippers. We share industry trends, company news, and other updates shippers should be aware of. Sign up at the bottom of this page to get this newsletter and more sent directly to your inbox.
The first quarter of 2021 was anything but typical for shippers. Ports across America, from Los Angeles to Savannah, posted record import volumes. At the same time, the global shortage of shipping containers is becoming a more pressing concern by the day. This is to say nothing of the situation in the Suez Canal, which further increased the backlog of ships anchored in the water instead of unloading goods.
As we enter Q2, the reality is; there’s no end in sight, and the capacity crunch logistics professionals are facing will not be limited to drayage.
The global pandemic has caused consumers to be more reliant on home delivery than ever before, and this isn’t limited to parcel delivery. We believe demand for white-glove services for heavy and high-value goods will continue to skyrocket through, at least, the end of 2021.
For shippers, this situation means:
- The spot market will be incredibly volatile- we’ve all seen headlines about the volatility of cryptocurrencies like Bitcoin. Based on historical precedents, Bitcoin will have nothing on the unpredictability logistics planners will have to deal with, should they need to rely on spot pricing. In other words, it’s a great time to consider fixed-pricing for the rest of 2021, before it’s too late.
- Storage space is about to become premium real estate– many companies are switching from “just in time” to “just in case” supply chain approaches to ensure a Merry Christmas. This means increasing their inventory now to make sure the holiday season rush isn’t at risk. The approach has created a surge in the amount of storage needed and will likely put constraints on warehousing availability through the rest of 2021.
- Airfreight costs won’t be crashing anytime soon– Many companies have already turned to air freight for international shipping to alleviate some of the stresses at the ports. This trend will continue throughout the year. However, the return to consumer travel, spurred by mass vaccination, will make it even more expensive for shippers relying on air cargo; as consumer airlines that had been relying on cargo volumes to keep aircraft in the air now return to more normal operations.
On the Cargomatic front, we’re actively engaging our customers to set aside time for a freight audit to discuss their expected volumes and timing for the rest of the year as a way to get ahead of the extended peak season (or lack of a traditional off-season). Thus far, we’ve found creative solutions for many of our shippers who have had to diversify their supply chain approaches, move goods through new ports, or shift production to new facilities. We’re merging the flexibility of our marketplace with a forward-looking approach to ensure our shippers have a flawless holiday season in 2021.
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