The ocean contract season of 2023 has stretched unusually long, merging into the retail peak season. This elongation reflects shippers’ increased diligence in planning, influenced by recent years of high transportation costs and tight capacity. Understanding both short and long-term market dynamics is essential for effective decision-making during this prolonged contract period.

Key Considerations in the Current Ocean Logistics Landscape

1. Blank Sailings and Transit Times:
   • Impact of Low Demand: The low demand across global trade lanes is leading to more blank sailings, especially on trans-Pacific routes. This can significantly extend transit times and disrupt supply chains.
   • New Vessels and Slow Steaming: Despite ample capacity, slow steaming, particularly on the Europe–Asia lane, prolongs transit times, affecting shipment planning.
2. Shifting Port Strategies:
   • East Coast Preference: Shippers have increasingly favored U.S. East Coast ports due to pandemic-related backlogs and labor negotiations on the West Coast.
   • Potential Shifts Ahead: With labor negotiations nearing resolution, shippers are contemplating a return to West Coast ports, which may necessitate quick adaptation to maximize efficiencies and minimize disruption.
3. LCL as a Strategic Shipping Option:
   • Rising Popularity: Less than container load (LCL) shipping has become a strategic choice for moving smaller inventory volumes, especially with warehouses facing overcapacity and cost pressures.
   • Survey Insights: A significant number of shippers plan to continue or increase their use of LCL shipping in 2023.
4. Diversification of Supply Chains:
   • Reshaping Strategies: Companies are diversifying suppliers, assessing manufacturing footprints, and considering reshoring or nearshoring options to enhance resilience.
   • Adapting Manufacturing and Distribution: Some businesses are optimizing their production lines and distribution centers to streamline manufacturing and shipping processes.
5. Optimizing Across Modes:
   • Cost-Effective Approaches: Shippers are now prioritizing cost-cutting and optimization across various modes, including selecting ports closest to distribution centers and consolidating freight for better rates.
   • Strategic Mode Selection: Choosing the most cost-effective inland transportation method, whether rail or truck, is crucial for supply chain efficiency.

Partnering for Success in a Complex Market

In the face of a continuously evolving logistics market, staying informed about market conditions and understanding their long-term impacts are vital. Collaboration with logistics experts, like those at C.H. Robinson, can provide valuable insights and strategies for navigating these challenges effectively, helping shippers cut costs and optimize their supply chain operations.