Here are some of the top news stories in global shipping right now.
There are challenges — with a few uncertainties thrown in — ahead for container shipping in 2025. Factors such as overcapacity due to an excessive number of new vessel orders, weak demand growth, together with new and looming environmental regulations all play a part. Combine that with issues like potential turbulence in the economy, and you have the recipe for a complex outlook for shipping companies in the new year. The good news is that despite earlier predictions of a significant downturn, it now looks like the impact may not be as severe as anticipated. What does this all mean for shippers? While they may enjoy lower costs, the flipside is that too much capacity will lead to a reduction in supply — fleets could be cut along with other operational measures such as skipped sailings, weeks with sliding schedules, or services that are canceled altogether.
Our take: What does this all mean for shippers? While they may enjoy lower costs, the flipside is that too much capacity will lead to a reduction in supply — fleets could be cut along with other operational measures such as skipped sailings, weeks with sliding schedules, or services that are canceled altogether.
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How are concerns about supply chain inflation impacting how retailers are dealing with the 2024 holiday season? For one thing, many are implementing discount programs and using leaner, tech-driven supply chains — both of which should mean lower prices for this year’s holiday shopping season. In a recent survey, consumers, along with executives in retail and supply chain logistics, shared their concerns and insights. 85% of consumers stated they’re worried about price increases and that they’re actively seeking discounts, with 65% prioritizing retailers who offer free shipping. Interestingly, 70% of retailers said they plan to offset higher costs through sales, discounts, and loyalty programs. They’re also planning to expand omni-channel workforces to meet demand.
Our take: The pressure remains on supply chains to drive efficiencies and take the lead to ensure companies maintain healthy bottom lines and stay competitive. The pandemic pushed supply chains into the spotlight, and they appear to be staying there for good.
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As demand falls and global shipping alliances prepare to restructure, container carriers are competing for market share. Carriers have been reluctant to reduce capacity – or simply not doing so at all — which is complicating efforts to stabilize rates. This is especially true in major trade lanes like Asia-Europe and Asia-US, where they see excess capacity or a mixture of trends. Yet despite declines in demand and rates, some carriers are chartering more vessels instead of cutting capacity, which could lead to oversupply challenges and increased competition as alliances shift in 2025.
Our take: 2024 has been a volatile year for ocean rates — more or less so, depending on the lane. It’s in the best interest of all importers, especially in the current market environment, to always look for new routing options to save money or improve service reliability. Talk with Transmodal about new ideas you may not have considered, or that were not available in the past.
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