The logistics industry is currently in flux, due to changing seasonal trends and ongoing global developments impacting supply, demand, and transportation routes. Some of the most prominent factors impacting the logistics industry include the following.
The On-Going Red Sea Crisis
The Red Sea crisis, sparked by attacks on ships by Yemeni rebels, is causing ripples through global logistics. In May, there have already been two attacks against Panama-flagged container ships.
According to Al Jazeera, “The Houthis said that the explosions were missile attacks targeting MSC Gina and MSC Diego. They also claimed an attack on the MSC Vittoria in the Indian Ocean”.
The threat of attack against commercial vessels has disrupted routes, adding weeks onto journeys, and delaying deliveries for shipments from Asia to Europe. These unexpected schedule changes throw a wrench on just-in-time delivery models and increase the cost of fuel and labor, leading to higher freight rates.
Summer Shipping Means Increased Reefer Rates
Summer is upon us, with May signifying the beginning of the summer rush for many retailers. While the summer months are often a period of high demand, the extreme temperatures mean that temperature-controlled freight and storage are highly coveted.
As you can likely imagine, shipping frozen products across North America in June and July is significantly more challenging than doing so in the winter months. Stronger refrigeration requirements mean increased fuel consumption, which inevitably raises freight rates.
Therefore, if you deliver products that require a controlled temperature setting, be mindful of these seasonal fluctuations in rates and volume.
As we said at the start, the logistics industry is currently in flux. But that does not mean you have to halt operations. Be mindful of these ongoing external factors, plan accordingly, and you can continue smooth logistics operations.
Overseas Container Logistics (OCL) is a 3PL commercial freight-forwarding company based in Richmond, British Columbia.
If you have any questions about this article or would like to talk to us about your transportation and freight needs, give us a call at 604-295-8236.
Sources
https://www.aljazeera.com/news/2024/5/9/yemens-houthis-say-they-attacked-ships-in-gulf-of-aden-indian-ocean
