Catch up with us as Trent returns from the Trans-Pacific Maritime Conference, ready to share a 2023 update on the world of ocean freight.
We’ll cover how rates and reliability are shifting, the impact on global logistics, and what managers should be keeping an eye on right now.
It’s a great time to get informed about what’s next in international logistics!
Check out our conversation in the video for full insight!
Rob: A few weeks ago, Trent attended the Trans-Pacific Maritime Conference in Long Beach, California. It was an event where shipping professionals gathered to discuss the future of the international logistics industry. Trent, what stood out to you during the conference?
Trent: It was a great experience, with a lot of focus on the recovery of ocean freight after the disruptions caused by the pandemic. Between 2020 and 2021, we saw rates spike dramatically—by as much as 50%. Service reliability also took a hit. However, we’re beginning to see rates stabilize, and there’s optimism about a return to more predictable conditions.
Where Does International Logistics Stand Now?
Rob: So, what does the landscape look like now, especially when it comes to freight rates and service?
Trent: Rates are starting to return to pre-pandemic levels, and we’re hearing that this trend will continue. For contract negotiations in the coming year, you can use 2019 rates as a reasonable benchmark, with adjustments based on your specific circumstances. As for service reliability, it’s improving but still not back to normal. Currently, we’re seeing around 50% on-time arrivals, compared to the historical norm of about 75%. Shipping lines are trying to manage these challenges by implementing blank sailings, which can reduce supply and help keep rates in check.
How Logistics Bureau is Assisting Clients in This Shifting Market
Rob: Given all these changes, how is Logistics Bureau helping clients navigate the current landscape?
Trent: We’re working with our clients on long-term strategies to adapt to this shifting environment. With the market still in a “buyers’ market” phase, now is the time to lock in low rates for essential freight while taking advantage of low spot rates for less critical shipments. We’re also focusing on inventory optimization—helping clients position their goods strategically to maximize efficiency. Developing direct relationships with carriers is another important strategy to ensure stability when market conditions fluctuate.
Key Takeaways for Ocean Freight Managers
Rob: To summarize for anyone managing ocean freight, what are the key things to focus on right now?
Trent: First, take advantage of the current low rates by locking in contracts where possible. Second, establish direct relationships with carriers for better long-term stability and predictability. Finally, stay ahead of potential regulatory changes and ensure your strategy accounts for these shifts in the market.
Related articles on this topic have appeared throughout our website, check them out:
- 10 Freight Management Mistakes and How to Avoid Them
- Freight Benchmarking: What Is It? Why Do It?
- 12 Smart Ways to Reduce Your Freight Costs
Editor’s Note: The content of this post was originally published on Logistics Bureau’s website dated May 24, 2023, under the title “Ocean Freight 2023 Update with Trent Morris“.
