2018 has been packed with one shakeup after another, leading to one of the most uncertain environments in recent memory for shippers. The biggest headline-grabbers include:
- Trump’s tariffs. Arguably the biggest supply chain story of the year, the U.S. and China have kept importers on their toes with a barrage of duties. With roughly $250 billion in Chinese goods now subject to tariffs, businesses have been importing record-breaking volumes as they rush to get items in hand before duties take effect. The trade war is poised to escalate further, as Trump threatens to enact tariffs on an additional $267 billion in goods.
- The ELD mandate. The long-awaited mandate, which required truck drivers to install electronic logging devices (ELDs) that track and cap their total hours in service, has had a ripple effect across modes. The mandate reduced productivity for 83 percent of trucking companies, creating a capacity crunch and rising rates for shippers. Meanwhile, many ocean carriers have been forced to sit at port for trucks, prompting some to impose emergency intermodal fees and restrict door deliveries.
- Ocean turmoil. The industry’s move to cancel sailings in an effort to improve profitability shocked many shippers this year, and continues to wreak havoc with capacity and rates. Total capacity has shrunk by 7 percent, leading to a 50 percent year-over-year spike in Trans-Pacific ocean rates and a scramble to secure space during peak season – even for shippers under contract. Those hefty prices are slated to continue into 2019, thanks to newly announced bunker adjustment factor surcharges.
- Disruption from disasters. When Hurricane Florence tore up the East Coast in September, businesses across the country felt its effects. Delivery disruptions rose by 49 percent that week nationwide, despite only a 2 percent drop in shipments. With more than a month to go before hurricane season ends, more disruptions could be looming for shippers.
Dealing with supply chain disruptions
For shippers large and small, the move toward technology-enabled supply chains is helping to improve visibility, control and responsiveness when things go awry. But while a centralized platform is the cornerstone of a high-functioning supply chain, hands-on support is the key to keeping it running day after day.
That’s why more businesses are turning to external providers to help them navigate this disruption-prone environment. Freight forwarders now account for nearly 45 percent of U.S. containerized imports from Asia, a 2 percent year-over-year increase. The right partner can help businesses access scarce capacity, tackle challenges head-on and offer best practices for improving operations. Here are a few areas to consider when choosing yours.
- Dedicated support. By assigning a single point of contact to your business, your partner can get to know your business goals, rules and requirements better, so they can make more effective recommendations.
- A deep logistics network. The ongoing struggle to source ocean capacity underscores the importance of a well-connected partner. Look for a partner with a strong network to help find available space at the best possible rates.
- Customs expertise. As the scope of U.S. tariffs extends to new areas like electronics, food and housewares, more businesses are bracing for the impact to their organizations. A partner with customs brokerage expertise can minimize the pain by ensuring harmonized tariff classifications are correct, helping to apply for exemptions and taking other steps to ensure customs compliance.
For supply chain professionals, dealing with disruptions is a growing part of the job. Finding the right partner can help equip these businesses to face today’s biggest challenges – and whatever comes next.