Starting when factories in many industrial areas of China were shut down for disease control through the prolonged closure of businesses around the world, freight volumes of products have been hit hard. With demand dropping as people stayed home from closed stores and workplaces, evidence of the faltering global economy was apparent in the sharp drop of worldwide container volumes.
As economies open up globally, there is some sign for recovery in the freight market. There has been a shortage of immediate capacity for many importers coming from China, as many retailers are seeing a very strong need to replenish inventories.
This means that the spot rate market is heating up and ocean rates are unusually high. In terms of overall volume, there is still much less freight than years past, but the immediate demand for capacity along with reduced sailing has put prices in a crunch. Importers in the USA should be working with a skilled forwarder like JM Rodgers with lots of options for freight movement, as there will be a need to find the best rate options in a tight market.
However, increased rates don’t tell the whole story. An alliance of most of the major carriers have agreed to reduce their sailings considerably through the end of the third quarter, anticipating lower than average shipments even with a slight recovery. This tight capacity means that while ships are filling up and rates are hitting normal ranges, the volume being moved is still far reduced from previous years.
The worldwide drop in passengers that has devastated commercial airlines has thankfully not hit the air freight market quite as badly. Volumes have dropped worldwide but rates had increased, due to the reduced passenger flights that reduced co-loading opportunities. Right now rates are beginning to fall as more capacity becomes available along with a dip in demand, so importers should be on the lookout for favorable spot rates.
The current global freight situation is highly volatile, with constant changes in different sectors affecting volumes and prices on a daily basis. It’s necessary for all importers bringing cargo to the USA to have a forwarder with the knowledge, skill, and options necessary to find the best rates and make sure your cargo is loaded. JMR’s global network allows us to find these options and bring real cost savings to our clients.
Please contact us at www.jmrodgers.com
Sincerely, James Rodgers CEO