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Logistics Market Update – August 2023

Logistics Market Update – August 2023 850 477 Transmodal

Here are some insights on three of the top freight events happening right now.

The FMC can’t seem to catch a break lately. Last year, they had both shippers and carriers protesting a proposed rulemaking where they attempted to define what they classified as an “unreasonable refusal to deal or negotiate” when it came to carriers and the vessel space they made available for shippers.

In a bid to further define what they meant, the FMC submitted a supplemental notice of proposed rulemaking (SNPRM) back in June. Now carriers aren’t happy, while shippers are on-side.

What has carriers on edge? First, from their point of view, the change gives the commission too much authority. And the changes would mean they need to file annual export policies that would—as far as carriers are concerned—put any competitive edge they may have at a disadvantage. The report would require them to share their pricing strategies, services offered, strategies for providing equipment, and a list of the markets it serves.

Our take: More transparency on pricing is a good thing, but importers need to always consider service (as in transit times and the support they receive from their forwarder) along with rates. Like most things, you often get what you pay for with ocean freight.

Read more here.

A month ago, a warning went out to the industry. Things were lining up for a perfect storm in the U.S. supply chain. Now we’re in a one step forward, one step back scenario.

The storm is the challenges the supply chain is facing from things it can’t control. Like the war in Ukraine, rising inflation, decreasing product demand, and more. The “more” included a potential UPS strike and a chance of Yellow going bankrupt. The strike was averted, but Yellow did indeed go bankrupt, putting 30,000 out of a job and impacting the supply chain and consumer prices.

Our take: While the reality of what happened in terms of freight is different, the message remains the same. And it’s not too late to take action. If they haven’t done so already, shippers need to validate with the TSA Known Shipper program if they want to lessen the impact of disruptions.

Read more here.

Sustainability is something that gets talked about a lot with supply chains and for good reason. The future depends on it. But figuring out how and what action to take today are not simple decisions.

Taking steps towards decarbonization is one approach that most agree is an important area of focus toward better sustainability. However, with any goal, it’s advisable to consider what impact each change you make to achieve that goal will have across the board. Because sometimes, good intentions can produce bad consequences. For example, at what price will the race for decarbonization come? Balancing the impact can affect customers, suppliers, and even the ROI of a business.

Our take: If you are not already, chances are logistics professionals will be required to do more to help with decarbonizations by the companies they work for at some point. Start now by talking to your providers to find out their sustainability practices and how they may be able to help with reporting you may be required to do in the future.

Read more here.

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Logistics Market Update – August 2022

Logistics Market Update – August 2022 1920 615 Transmodal

The industry is used to hearing news about port congestion and ships loitering as they wait for berths—at least at the West Coast ports of Los Angeles and Long Beach. But the tide has shifted. As carriers try to escape the backlog in the west by moving to the east, the problem has followed along like an albatross. The Ports of Houston and New York now have as many containerships waiting for berths as Los Angeles and Long Beach combined.

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The summer saw still more lockdowns in China as COVID fears continued. Fortunately, Shanghai’s two-month-long lockdown was lifted and with it some speculation that leadership may relent—at least to some extent—on their zero covid policy. There is no escaping the impact on their economy, and manufacturers are becoming increasingly vocal about leaving the country and near-shoring production back to the US and Europe.

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According to a survey of 233 senior procurement executives done by Ivalua, nearly all procurement leaders—97% of them—say they are facing significant disruption in the direct materials supply chain. 67% say they have little to no confidence in existing technology, and 84% say modernization needs to be a priority.

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The Biden Administration is considering a relief package that will roll back some of the tariffs that were previously imposed on China during the Trump Administration—which raised prices on everything from diapers to clothing and furniture. The expectation is that a modest list of tariff suspensions will tamp down inflation.

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The FMC has a bit of a conundrum. Back in June, a vote was passed, giving them more power to handle allegedly unfair business practices carried out by ocean carriers and marine terminal operators. But now they’re saying they don’t have enough staff to enforce reforms. According to FMC Commissioner Carl Bentzel, “We have major rulemakings we’ll be starting in the short term but very few people to do the work, so we’re wrestling with that.”

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3 Important Credentials Your Freight Forwarder Must Have

3 Important Credentials Your Freight Forwarder Must Have 850 566 Transmodal

If you are new to using a freight forwarder, or maybe have been using one and had not thought to ask about credentials, here are three things your freight forwarder must have. read more