Can you believe we’re already halfway through 2021? At our office, it's equally hard to fathom being six months away from 2022 and to comprehend the level of distortion and growth in the transportation market. One year after lockdowns maxed out and the logistics industry is still working overtime to mop up that mess. Ports are clogged, equipment and space is hard to come by, and you, dear exporter and importer, are probably paying through the nose for service.
It’s a perfectly crafted shipper’s nightmare. But instead of being back in high school and having to take a test or give a speech, this time the forces of nature and the marketplace are conspiring to keep importers and exporters from doing their jobs.
Where do we begin? A logical place to start might be e-commerce. Online sales rose 44% last year, tripling the previous year’s growth. But even with the coronavirus receding, the appetite for internet shopping has not. eMarketer predicts that e-commerce is going to grow by 14% this year, to a whopping $909 billion in sales.
As you’re probably painfully aware, shipping all of that retail doesn’t come without a cost. And we’re not even talking about the cost of your sanity as you try to import perishables while dealing with Peleton bikes, ugly sweaters, gardening equipment, and whatever else is clogging up transportation right now. With online retail gearing up to join the four comma club, it’s squeezing capacity at ports in a major way, and sending rates through the ceiling. Check out this aggregation of ocean rates to see what we’re talking about. It’s like a rollercoaster, only instead of the fun drop, it just keeps going up.
Ocean carriers have become such a hot item that it’s shifting cargo to airfreight that otherwise wouldn’t be (think: perishable products). So even if you aren’t personally moving inventory and produce on an ocean vessel, we’d be surprised if you aren’t feeling the squeeze.
But let’s say that you aren’t having trouble moving your wares. You’ve found the Southwest summer sale type deal, and a carrier who is happy to honor it. That’s a great first step, but it’s not the end of the story. Alas, moving freight this summer is akin to playing Jumanji.
Next up, there’s the trucking market. Not only is it tighter than in 2018, but we’re in the middle of a mega driver shortage (it could reach 160,000 this decade, according to the American Trucking Association). We like this subheader: “Fleets Enjoying Historically Strong Business Conditions.” At least somebody is enjoying it?
And, as you probably know, peak season is lurking around the corner. Will the market get even tighter? Has it maxed out yet? Only time will tell. Mark Twain once said, “Too much of anything is bad, but too much good whiskey is barely enough.” That probably sums up how most shippers feel these days.
We wish we could snap our fingers and solve these problems overnight. Short of that, what we can do is recommend that you find a logistics partner who is ready to be a long-term partner and sees you as more than a budget item. Hopefully that’s your experience already. If it isn’t, that’s how we think, in value-adding long-term partnerships to go through times like these, together and successfully.
Are you ready for Able Freight? Contact us +1 (310) 568-8883 or firstname.lastname@example.org