511 - Market Update Q2 2021

Shipping and Supply Chain Logistics

Tight ocean freight shipping capacity, port delays and domestic freight increases will drive higher costs through 2021.

Inbound Ocean Freight Insights

▪ As predicted, Ocean Shipping’s new-found profitability from spot-rate pricing practices is keeping rates high for trans-oceanic sailings. High freight rates are expected to persist through 2021. ▪ Shipping lines are reporting record freight prices and are prioritizing shipments to the highest money-making freight classes, often leaving lower-profit commodities at the dock. A February New York Times article cited typical 2019 container contracts for $2,500 are now priced at $7,000. ▪ Though 93 container ships are on the move again, after being stalled nearly a week by the grounding of the Ever Given in the Suez canal, ocean freight experts are warning of months-long shipping capacity and equipment constriction due to this single incident. (JoC.com) ▪ Port delays in processing inbound container shipments have been exceeding 35 days. Equipment shortages, and port-side Covid operating restrictions and outbreaks contributed to dozens of container ships off the coasts of major North American ports waiting to be off-loaded, throughout the First Quarter.

Outbound & Domestic Freight

▪ Winter weather disruptions impacted ground transportation with a significant increase in the number of delayed or completely unshipped outbound domestic shipping tenders reported, contributing to 12% average increase in domestic delivery charges. ▪ North American trucking remains short of drivers, exceeding 80,000 open positions. This capacity constraint, similar to Ocean Freight, is leading to spot-pricing practices that are helping lift public carrier company profits to record levels. (CCJ Digital)


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