We are continuing to monitor the influence of restrictions in the Panama Canal and the avoidance of the Suez Canal on global shipping lanes. Ocean cargo rates across the world remain at elevated levels, however, expectations of Mid-February cargo rate stabilization may provide some hope of relief.
Data pulled from FreightOS demonstrates ocean container prices within the typical range in November and early December, to the spike in ocean container prices worldwide across all lanes.
Shipping rates from the Far East to the U.S. East Coast have risen over 146%, and shipping rates from the Far East to the U.S. West Coast have increased more than 186%. In light of these increased costs, shippers across the U.S. need to be willing to utilize multiple options to get products to their end destination.
These options include:
Routes that ship to West Coast ports and potentially utilizing intermodal rail to ship goods overland. West Coast shipping is seeing greater rate increases due to increased demand.
Approach the East Coast directly from the west by going through the congested Panama Canal
Plan for 10-14 days of additional transit time by going around the Cape of Good Hope to get to the East Coast
The second-largest global ocean carrier, A.P. Moller-Maersk, advises in an interview with CNBC, “…[c]ustomers need to have the ability to enter the North American market from different endpoints. Be it the West Coast, Gulf, or the East Coast. Our preparation of services very much depends on one-to-one work with our customers to identify what is their best alternative.”
Further, Maersk offers, “Our advice to our customers is specifically about building upon the uncertainty by being agile”. Working closely with the project team, vendors, as well as our team here at Audit to have multiple shipping options and contingencies in place is the best way to take advantage of shifting conditions.
Audit Logistics will continue to monitor global trends, and work with our project teams to organize and adapt to the changing conditions. Please reach out to your Freight manager should you have any questions or concerns on your projects.