What peak buying season means for maritime freight and how an Asian trade deal affects shipping costs
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While tender rejection rates continue to recover for land-based freight through the month of November, the maritime sector is still seeing issues.
During this week’s episode of Freightonomics, Zach Strickland and Anthony Smith broke down how the container shortage is affecting this recovery of maritime freight.
Even though the market is still on a steady rise heading into peak shipping season, carriers are having a difficult time moving freight into the United States, specifically from China.
There has been a pronounced shortage of shipping containers for freight to be moved in even though it is ready to be brought over.
Contributing to this shortage is a bottleneck at seaports in the U.S.
Strickland says that lots of freight has found its way overseas, but it is sitting on ships that are anchored in ports waiting to 1. make it through customs and 2. move to its final destination.
He also thinks this bottleneck will be worsened due to the e-commerce nature of the peak buying season.
While the e-commerce boom has supported the consumer market, it has also forced some online retailers to reevaluate how they offer products to customers.
Smith says that shopping online takes away the instant gratification people receive when shopping in stores, and that if a site doesn’t have a desired item, 50% of customers will not return to the site.
He also says that to counter that, e-comm sites should offer immediate substitutes for items, like Amazon does with its “suggested” tabs.
Also impactful to the U.S. import market is a recent trade agreement formed by some Asian countries.
Smith thinks agreements like this can be good for the U.S. economy because it creates pressure to become more efficient.
Entering into regional trade agreements, like the former NAFTA agreement, can force the U.S. to become more efficient in its trading both foreign and domestically, which could help as high volumes of imports and exports are expected to continue.
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