Entering into the third month of 2021, shippers are still seeing the same issues with global congestion and equipment shortages that have plagued the entire cargo industry since the latter half of 2020. Without the ability to have the equipment and space to move cargo, shippers are increasingly unable to effectively meet their customers’ demands.  

A persistent and hard-to-solve issue has been the ability of shippers to simply get their hands on the equipment they need to ship, especially shipping containers. Uneven global slowdowns in freight have led to displacement of supply, making them difficult to access for many shippers as empty containers are not necessarily where the cargo must be. New containers continue to be added at roughly the same rate as previous years, but the unprecedented disruptions continue to make them hard to obtain.

This puts huge strain on importers and exporters in the USA, as the ongoing demand surge for overseas products to assuage pent-up demand from reopening economies drives orders and cargo pricing to new heights. Exporters, especially agricultural, remain hugely disadvantaged as getting equipment to less coastal areas, which takes a longer time commitment, is not easy right now.

This shortage and unusual shipping season is leading to potentially major changes in BCO contracts with both major and smaller shippers. The carriers have had a difficult time providing the space and equipment, but so too have many shippers had challenges providing shipments for slots they committed to, as economic recovery has been uneven. 

Carriers in this environment are looking for their contracted partners to have more of a commitment on their side too, ensuring that everything that’s being requested is being used, as demand far outstrips supply and empty slots from unfulfilled contracts become major problems. Carriers will begin to seek compensation from shippers whose weekly or monthly shipments go unused, raising the risk for shippers who seek the security of a BCO contract.

One way to be able to navigate this kind of uncertainty is to be able to use both the BCO market and spot rates deftly. While spot rates continue to rise in the face of ongoing demand and a BCO contract may seem like an attractive, safe option, it creates a risk as failure to reach commitments will be pursued by carriers. 

JMR’s unique “Freight Management” program can manage both BCO contracts as well as get spot rates from some of the most competitive prices on the market. This is a key “sweet spot” for most shippers. Being able to have guaranteed space- allocated to a level that can be comfortably met- while still having the ability to move freight competitively over spot-rate markets is the best of both worlds.

If you are looking for a freight forwarder to find you lower rates and make sure your product sees no delays in shipping times, look to J.M Rodgers and our new freight tracking service. We can provide you amazing customer service while helping your company stay competitive with rates, please contact us at www.jmrodgers.com