As we inch closer to October 1, the shipping industry is preparing for a storm that could shake the foundations of the U.S. East Coast and Gulf Coast ports. With the looming threat of a dockworker strike impact and declining shipping rates across major routes, the logistics world is anything but calm. From organized retail shipping disruptions hitting major retailers like PacSun to e-commerce dominating the air cargo peak season, the challenges keep coming. In this edition of the Silq Scoop, we dive into the latest developments and what they mean for retailers, importers, and shippers worldwide.
U.S. East and Gulf Coast Ports on the Brink of Chaos
The port strike is around the corner, folks. After months of denial by shipping stakeholders and near-constant warnings by the International Longshoremen's Association (ILA), U.S. East Coast and Gulf Coast ports are preparing to face a strike like it has not seen since 1977.
The impending strike on October 1 will follow the expiration of the current ILA's contract with the U.S. Maritime Alliance on September 30. If it happens, the dockworker strike impact will disrupt billions of dollars worth of imported goods, including autos, electronics, food, and agricultural products. Talk about a gut punch to the economy, especially in an election year.
Industry experts, such as the National Retail Federation (NRF) and the National Association of Manufacturers (NAM), have expressed concern over the strike's potential impact on retail shipping disruptions during the holiday season. However, such concerns do little to quell the ILA’s grievances.
India-U.S. and Europe Container Shipping Rates Drop Amid Cooling Demand
Earlier peak seasons are usually exciting but come with risks—an earlier end to the peak freight season. Don’t take our word for it; freight rate fluctuations on major export routes from India are a testament. Container shipping lines are experiencing significant rate declines as demand cools following earlier peak season backlogs.
Rates from West India to North Europe have fallen by $600 to $1,000 per container since the end of August. While this is bad enough, especially considering the holiday season, there’s more. India-based freight forwarders expect further rate reductions due to reduced cargo volumes, as carriers struggle to maintain previous rate gains.
Some major carriers, like CMA CGM and MSC, plan to raise rates regardless, but skepticism about such efforts remains high. The moral of the story? Earlier peak seasons are great, but cutting the peak season window short creates new challenges for the shipping industry.
Rise in Organized Returns Fraud Strikes Retailers, PacSun Among Victims
The trend of online returns fraud continues to plague the industry, especially companies offering free returns to their customers. PacSun, a major retailer, is the latest victim, with one customer returning 250 orders worth $24,000. If you’re wondering how a customer can do this, you’re not alone. We are, too.
After an extensive investigation, the company discovered that many returns involved used, incorrect, or no merchandise. They’re part of a broader pattern driven by tips shared via Telegram and other platforms. Retail shipping disruptions like these are becoming more sophisticated, highlighting the darker side of innovation.
PacSun’s investigation also revealed that fraudsters exploit online returns by manipulating return labels and shipping empty boxes or unrelated items to claim refunds. Technology is indeed a two-way streak.
U.S. Retailers Upgrade September Import Forecast Amid Potential Dockworker Strike
Still on the looming strike issue, U.S. retailers, especially those operating in the East Coast and Gulf regions, have significantly increased their September import forecast. Apparently, some people took the ILA’s warning seriously enough.
The import forecast anticipates 2.31 million TEUs, up 14% year over year. August imports were also projected to hit 2.37 million TEUs, marking a 21% year-over-year increase. However, beyond the panic, there’s some good news. If the forecast holds, 2024 will see seven consecutive months of imports above 2 million TEUs, reflecting a 12.3% increase in total imports from 2023.
E-commerce Dominates Air Cargo Peak Season, as Capacity Tightens
The upcoming air cargo peak season is expected to get tricky, if not outright challenging. E-commerce platforms occupy a significant portion of the already limited capacity, raising questions about space availability for general cargo shippers.
Industry experts predict unprecedented demand driven by e-commerce, geopolitical factors, and product launches. Air carriers, meanwhile, are expected to prioritize higher-paying e-commerce shipments, leaving general cargo shippers with limited options. Freight forwarders like DSV and DB Schenker are already feeling the pinch. They’re prioritizing existing customers and seeking additional capacity to accommodate the surge in e-commerce demand.
But the overall message is clear: general cargo shippers need to brace for impact as e-commerce continues to dominate.
Silq Offers Stability Amid Volatile Shipping Operations
We understand that international shipping can be challenging. Enough shippers worldwide face an uphill battle to deliver their orders at the right time and volume. You might, too. We understand, and we can help you.
The Silq platform has a proven track record of streamlining shipping operations for shippers. Even amidst the sea of challenges plaguing many supply chains today, we can bring this same success to you. Connect with us today, and let’s talk further.
