When it comes to ocean shipping, today’s logistics teams face a near-unprecedented number of obstacles: rising geopolitical tensions, routine port bottlenecks, volatile pricing, and container shortages, just to name a few.
A lot is at stake—ships drive 80% of all global trade—and amid rising dwell times, climate crises, and supply shortages, teams are scrambling to stay afloat.
While the future remains uncertain, shippers can rise to the occasion by keeping a close eye on market movements. Along the way, they can also proactively tackle supply chain vulnerabilities by strengthening carrier relationships, embracing industry-leading technology, and negotiating competitive freight rates.
Soaring ocean shipping costs show few signs of letting up
Over the last few years, ocean shippers have seen skyrocketing freight rates—a trend that’s likely to continue, especially in the face of inflation challenges and vessel attacks in the Red Sea. Combined with long-standing labor shortages and rising fuel costs, these challenges are straining logistics teams around the world—especially those working with container ships and bulk carriers.
Rising ocean freight rates hurt small and medium-sized firms the most
In the face of it all, the ocean shipping industry itself is undergoing major changes. Amid soaring ocean carrier rates, many smaller firms have been unable to compete with their larger counterparts while preserving margins.
For businesses raking in $5 million or less in revenue, maritime challenges have been especially stressful—and many have raised end-consumer prices as a result. Amid continued container shortages and sky-high fees (including those for terminal handling, exports, international documentation, and more), many small and medium-sized firms have begun exiting the market.
Build in agility to field supply chain shifts
To stay ahead of the curve, shippers of all sizes must adapt to new ocean shipping trends. For some, that might mean redirecting shipments to less congested ports; for others, it might involve slow steaming, or deliberately reducing shipment speed to minimize fuel costs and carbon emissions.
Major epicenters of U.S.-Asia trade, the Port of Los Angeles and the Port of Long Beach are notorious for congestion issues. To avoid protracted dwell times—which can run several days or longer—many shippers are turning to other, less congested ports.
And thanks to slow steaming, ocean shippers are embracing fuel savings with new fervor. The practice—whereby shippers reduce sailing speeds by up to 20%—can cut associated CO₂ emissions by up to 40% (and in extreme cases, 60%).
Cut costs and risk through strong carrier relationships
One tried-and-true risk management strategy? Carrier diversification. When navigating unpredictable waters, shippers can minimize risk by partnering with as many dependable carriers as possible.
Building a strong carrier network offers other benefits, too: with an extensive range of partners to choose from, shippers can ensure optimal pricing and performance for each distinct shipment route. Carrier diversification also provides access to unique benefits and areas of expertise: specific carriers may specialize in geographically specific maritime territories, for example.
The result? The right carrier decision for each route—and freight that’s delivered on time, in proper condition, and with full accountability.
Let technology lead the way
How can shippers secure the right logistics partners and shipment routes? Technology—in particular, a sophisticated transportation management system (TMS)—enables just that.
CTSI-Global’s Honeybee TMS, for example, allows shippers to filter carriers by price, performance, route, and custom criteria. They can then choose the most strategic and cost-efficient carrier for each shipment—and in time, even negotiate better rates.
Sail through any supply chain challenge with CTSI-Global
Recent ocean freight challenges have proven uniquely unpredictable. Even so, well-prepared shippers can stay afloat—and even rise above their competitors, so long as they’re equipped with the right tools and strategies.
By cultivating meaningful relationships, implementing best-in-class technology, and embracing innovative strategies, today’s shippers can build an ocean shipping approach that goes the distance—and wins out every time.
In need of smarter ocean freight management tools? Contact CTSI-Global today.
