The events of 2020 had quite the impact on the volatility of the shipping market. While U.S. Imports dropped drastically in the first half of 2020, they bounced back some 50% in the back half, creating more demand than carriers and 3PL’s were expecting to handle.
As a result of the volatility in supply and demand, there has been a greater demand for space on vessels than available carriers. This has created what is referred to as a “tight capacity” shipping market, and has driven shipping prices through the roof while dwindling the available options for transit times and available routes.
How to Stay Ahead with a Tight Capacity Shipping Market
While shippers will simply half to wait it out for things to get entirely back to normal, there are several things you can do to stay ahead so as to mitigate the risks associated with delayed or late shipments and the effect they have on your bottom line and customer base. Here are some suggestions!
Book Earlier
You probably are already booking plenty early as a general smart shipping practice, however, in times like these it’s imperative that you are extra proactive about your booking times. It’s a good idea to reach out to your freight forwarder and ask them what their general required lead time has been on booking shipments with truckers and what you should anticipate for your shipments.
Look to Other Shipping Modes
We know you may have 101 reasons as to why you avoid intermodal transit, but desperate times call for desperate measures, and while you may think a particular shipping mode is inferior, there’s a chance that it could be the right solution in the interim as you wait for capacity to return to normal.
The biggest thing here is to just ensure that you talk with your freight forwarder about options. They are probably already devising unique and clever solutions for their customers that are helping to bridge the gap in transit times and costs, and by remaining inflexible, you may actually be doing yourself and your company a disservice. Chat with your freight forwarder!
Be Strategic with Cargo Consolidation
Cargo consolidation is one of a few areas that shippers entirely neglect strategy in. When shipping capacity is tight, there’s nothing you can do to change it, so you may as well embrace it! The more cargo you can ship whenever it is made available, the more efficient and effective you’re being with your logistics budget. And that’s exactly what you should be doing now (assuming it works for your business).
We understand that cargo consolidation isn’t always super easy, and it requires a great deal of thought and planning. However, we’ve helped countless customers on rethinking their shipping practices by consolidating more cargo into fewer shipments, and we’ve watched it drastically decrease shipping costs and timing over the years.
If you are interested in getting ahead during a season of tight capacity in the shipping market, please don’t hesitate to simply reach out to one of our team members and ask us any questions you may have! We’re doing everything in our power to help shippers rethink their shipping practices, approach consolidation differently, and get the most out of their available space during each shipment. We look forward to helping you out!