2023 will be a challenging year for cargo owners. The person in charge of the supply chain of a large American retailer said that by the end of 2023, the retailer’s inventory was still higher than expected, and the main response was to continue to significantly reduce orders, which led to a reduction in the retailer’s import volume, which in turn affected the overall impact. Import and domestic shipping within the United States.
For many small and medium-sized cargo owners, e-commerce demand appears to have declined significantly, leading parcel carriers to re-evaluate freight rates, peak surcharges and GRI agreements, making the parcel services market more of a buyer’s market.
In such a market environment, cargo owners need to face the challenges of rising equipment and labor costs and declining freight demand. The industry is expected to take a year to balance supply and demand, barring more geopolitical issues. Therefore, cargo owners need to consider continuing to reduce transportation links and compress transportation time through the supply chain to cope with market tightening. Becoming a top cargo owner is also a priority, while dealing with rising equipment costs, uncertain energy costs and labor supply requires a push for innovative solutions that leverage shared capabilities in short-haul markets.
In terms of shipping, shipping companies quickly adjusted their freight pricing strategies in 2023, and most companies’ prices dropped to close to pre-epidemic levels, resulting in ample shipping capacity for a full year and creating a fiercely competitive market. Service remains an issue for ocean carriers, with some still performing below cargo owners’ expectations of service providers.
In terms of domestic freight in the United States, 2023 will be a very difficult year for transportation companies. The spot price reduction affected all contract price renewals, and despite higher costs, prices have fallen to pre-pandemic levels. Tow trucks, trailers and drivers are plentiful, but delays in equipment availability due to supply chain issues have put pressure on hauliers who need to find volume to cover fixed costs.
Overall, 2023 is a confusing market for cargo owners. Faced with challenges like this, cargo owners need to partner with companies that understand their biggest pain points to ensure end-to-end visibility into their supply chains.
Post time: May-04-2024