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 dockworkers' strike and declining shipping rates across major routes, the logistics world is anything but calm. From organized returns fraud 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 disruption that follows will impact billions of dollars worth of imported goods, including auto, 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 impact during the holiday season. However, such concern would do nothing 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 they come with risks -- an earlier end to the peak freight season. Don't take our word for it; container shipping lines on major export routes from India are experiencing a significant decline in rates. Why? Word out in the market is that demand is cooling 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, but there is more. India-based freight forwarders expect further rate reductions due to reduced cargo volumes, and carriers struggle to maintain previous rate gains.
Yeah, some major carriers, like CMA CGM and MSC, plan to raise rates regardless, but there is huge skepticism about the success of such a GRI. Moral of the story? Earlier peak seasons are great, but coming early often means they cut the actual peak season window short.
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 are wondering how a customer can do this, you are not alone. We are as well.
After an extensive investigation, the company discovered that many returns involved used, incorrect, or no merchandise. They are part of a broader pattern driven by tips shared via Telegram and other platforms. Honestly, innovation touches everywhere, even the dark parts of the world.
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 were projected to hit 2.37 million TEUs, marking a 21%.
However, beyond the panic, there is some good news. If the forecast can hold, 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, begging the question of space for general cargo shippers.
Industry experts predict an unprecedented level of demand driven by e-commerce, geopolitical factors, and product launches. But guess who is benefiting from all of that? Yep, it’s the air carriers.
Airlines are expected to prioritize higher-paying e-commerce shipments, leaving general cargo shippers with limited options. Yes, it is borderline mean, but what would you do differently? Freight forwarders like DSV and DB Schenker are already feeling the pinch. Now, they are prioritizing their 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.”
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.
