What should ocean shippers expect in this peak season? Experts weigh in.

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The peak holiday season will not be the same as in previous years, according to various experts.

This year, retailers are scrambling to clear inventory piles as demand falters in the fourth quarter. Shipping carriers are blocking more crossings. Port congestion has moved from the West Coast to other parts of the United States. Meanwhile, shippers are monitoring labor negotiations while developing their logistics strategies.

To get a better sense of the logistics environment, we asked four experts: What’s in store for shippers and shipping carriers this holiday season, especially as congestion and inventory trends change ?

Some answers have been edited for length and clarity.

Ali Ashraf

Director of Ocean Products at CH Robinson

Shipping now is very different from last holiday season, when many businesses hoped Santa would bring them a shipping container for Christmas. While trade lane rates are trending lower and capacity is healthy, global schedule reliability is still far from normal, and shippers should keep in mind their expectations for on-time deliveries. as we approach 2023. Before the pandemic, the reliability of global schedules was around 80%. After hitting a low of 30.9% in January, it has risen slightly this year, but only to 46% so far.

We haven’t seen the traditional oceanic peak season this year as retailers with full stocks have delayed and sometimes even canceled orders. During the pandemic, many shippers switched from ocean freight to air freight to move goods urgently as retailers faced empty shelves and manufacturers experienced parts shortages. But now some air shipments are heading back to the ocean as shippers seek to cut costs.

Some shippers may still see delays this holiday season on the West Coast for freight moving by rail from Los Angeles and Long Beach is still congested due to shortages of chassis, railcars and railroad labor in domestic rail locations such as Dallas, Chicago, Memphis, Kansas City, & Saint Louis. Sometimes it is possible to mitigate some of these disruptions, where shippers can identify in advance which rail lines a steam line has agreements with. For example, knowing the shipping line and rail mix for freight to be delivered north of Chicago versus south of Illinois can give shippers faster delivery time and lower cost to their destinations.

Joshua Bowen

Senior Vice President of Ocean Freight for North America at CEVA Logistics

The ocean market during this holiday season is definitely going to be milder than years past. While current import statistics still show growth, the majority of the volume can be attributed to clearing congestion on the West Coast, which has improved significantly over the past 60 days. This factor is accompanied by a reduction in the aggregate exports of the world’s productive capital. In response, carriers are taking aggressive approaches by cutting specific crossings and canceling specific rotations in order to cope with reduced demand.

Carmit Glik

CEO and founding member of Ship4wd

This year, we are not seeing the “normal” pre-holiday peak that we have experienced in previous years. It reflects high inventory levels and lower consumer demand. As a result, we are seeing lower shipping rates for all trades, especially on the West Coast of the United States, where port congestion has eased. This clearly indicates that we are returning to a pre-COVID-19 environment that will benefit importers, exporters and the end consumer.

Spencer Shut

Senior Consultant at Proxima

The peak of shipping is largely behind us, as we have seen retailers stockpiling warehouses for months in anticipation of new supply chain bottlenecks. Ongoing supply chain talks are now centered on strike threats and capacity crunches.

Historically, West Coast ports have been a key indicator of sea freight. However, that only tells part of the story. Due to the threat of strikes stemming from ongoing labor negotiations, shippers have diverted volumes to ports on the East Coast and Gulf to keep cargo flowing. While West Coast volumes have declined in the first 9 months of this year, compared to last year, East Coast and Gulf ports have seen continued increases.

Companies are eyeing replenishment models versus forward storage models as inventory builds up, demand declines and ocean levels fall from pandemic highs.

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