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Shippers through the pandemic have seen their costs skyrocket and their customers’ buying patterns and methods change. From the early days when China’s factories reopened and consumer goods, e-commerce and mail took a backseat to PPE shipments with planes grounded and sailings blanked, the seeds of where we are today were sown.
With alarms sounding everywhere about the cost of transportation, with concerns about inflation tied directly to these increased costs, with American exporters begging the government for help getting equipment and space, President Biden is signing an Executive Order that is focused on competition widely, but includes as its areas of focus air, maritime and rail competition.
From the Fact Sheet posted at whitehouse.gov, the focus on transportation centers around American exporters.
The costs to ship by rail have risen in tandem with the costs to ship containers across the ocean. At some depots, it is a weeks-long process for containers to be offloaded and made available with shippers sharing stories that include five figure demurrage bills.
Regarding ocean freight, the White House called out today’s lack of competition.
The EO will encourage the Federal Maritime Commission to ensure vigorous enforcement against shippers charging American exporters exorbitant charges.
The FMC has already been investigating these charges, along with the lack of equipment because shipping lines have focused on returning boxes to Asia to load with imported consumer goods. A Congressional subcommittee even held a hearing on the topic as well.
A webinar was held this past week by Sourcing Journal about the transpacific capacity challenges and current and future market conditions.
The Executive Order is an important step, but should shippers anticipate immediate relief? In our opinion, unfortunately not. Rates are forecast to remain high into 2022. Charter rates are at all-time record highs.
Any effort to move to forward on the issues raised in the Executive Order will take a concerted effort that includes not just the US, but the EU as well, and they’re aware of what’s going on.
For now, Alba Wheels-Up is focused on working with both our customers to forecast and protect space and with the carriers to provide slots and equipment to get their goods to market. To learn more about how we’re helping our customers succeed in one of the most challenging shipping environments in history, contact us today.
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