The Fight for Cargo Shipping

Businesses are suffering as cargo space on ocean liners is in high demand.  Retailers and other importers/exporters are having to outbid each other to claim their spot on international voyages.  Freight rates have been on the rise since the global economy decline has started.  Ocean shipping companies have had to raise rates and increase fees as container shortages affect their operational costs. 

International freight costs are higher than they’ve been in years.  Ocean shipping companies are relentlessly trying to decrease costs to spark increases in shipping demand.  They travel at slower speeds to save on fuel, cut back on advertising, and concentrate on operating in an efficient manner.  However, with the economy in a slump, most businesses have had to reduce inventory and stop production.  Container production came to a halt last year, causing the limited space that is affecting international shipping rates worldwide. 

The logistics of operating a shipping company are complex.  Rates and availability depend on the economy.  When container shortages occur, it ends up costing companies more money.  Not only do they have to pay more for shipping, but they can’t always know that they will win a spot on the cargo ship.  Space is a big problem right now.

Even as things improve for retailers, it still can take a while for the shipping industry to catch up with demand.   Space normally becomes tight during the summer months and other busy times, so when it’s tight to begin with, it’s difficult to handle the cargo increases as the peak season rolls on.

Ocean shipping companies are slowly getting back into full production.  Adding ships to the operating fleet helps to lessen the load and create space, but the back-up of containers is still a problem.  New containers are being produced and others are slowly trickling back to the ports where they can be used, but it could still take quite a few months to get back to where they were two years ago. 

The problems are being felt internationally.  Slower voyages save money, but keep the containers out to sea much longer than usual.  Businesses are finding it necessary to order their products much further in advance than they would like, which makes it hard to respond to spikes in market demand.  Companies are dealing with missed deadlines and low inventory, which affects their sales and doesn’t boost much needed customer confidence.   

Businesses that have transportation contracts with <a href=”http://www.shiplilly.com/”title=”Ocean Shipping”>ocean shipping</a> companies aren’t necessarily being guaranteed space on the ships.  In fact, some have to pay charges and fees that they are normally exempt from.  However, they are willing to do what they have to do to get their products on the shelves.  Customer demand is in fact rising and retailers are doing whatever it takes to have their inventory meet the demand whenever possible.

About the Author: Nelson Cabrera is the Business Development Manager of Lilly & Associates International, a transportaion and logistics company specializing in ocean freight and ocean shipping services. For more information, please visit http://www.shiplilly.com/.