Trends to Watch
- Ocean - TPEB Take advantage of currently soft conditions on the floating market (low rates, open space, across the board). Consider leveraging premium services as they have returned to excellent transit time performance.
- Ocean - FEWB On the Far East Westbound lane, demand remains flat pre-Labour Holiday—booking intake slightly increased and further dropped again. High inflation, high inventories, energy costs, and geopolitical instability are still impacting the demand at the European end. Spot rates are also decreasing.
- Air - Transatlantic The market continues to soften in both directions with demand continuing to decline. A large amount of capacity will be added for the summer schedule by US and Europe airlines, and volumes and rates are both expected to rebound in Q3 with demand picking back up, driven by product launches and improving economic conditions.
- Air Passenger capacity continues to recover with significant increase expected in the summer from Europe, North America and Asia. The added belly capacity will likely impact rates in Q3.
- Trucking - U.S. Domestic The FreightWaves SONAR Outbound Tender Volume Index (OTVI), which measures contract tender volumes across all modes, was down 25% year-over-year (3.3% month-over-month), or 9.6% when measuring accepted volumes after the significant decline in tender rejection rates.
According to the Flexport’s weekly market freight update report on May 10, 2023, just about a year ago, we shared a few ways businesses could manage the volatile freight market in order to stay ahead of their competition. A lot has changed in a year—port congestion is approaching negligible, factories in Asia are back to nearly full capacity, and for most, things look a lot like 2019.
That doesn’t mean it’s time to sit back and put your supply chain on autopilot, however. On the contrary, this is the opportune time to invest and assess if you have the right partners, tech stack and internal processes to handle whatever comes next. We can’t say when the next ocean vessel may block a major canal, can we?
We know that “getting ahead of things” is easier said than done, which is why we’ve identified three focus areas for SMBs as we head into the back half of 2023.
1. Advanced Planning Equals Better Cost Control
One of the only ways to recoup losses from last year is to control your costs now. Take advantage of the low ocean rates for the majority of your freight, either by consolidating multiple shipments into a single full container load (FCL) shipment, or by using a less-than container load (LCL) service. Having customer demand data at hand will allow you to time those shipments appropriately to remain in stock without suffering overages or stockouts.
2. Diversification Brings A Multitude of Benefits
This period of relative calm is the ideal time to work on diversifying your own partnerships, risks, mode options, and more. By setting in place a broad network of suppliers, freight and logistics partners, and even multiple destination warehouse options, you’re ensuring a high level of business resiliency.
3. Staying Flexible Can Yield Further Gains
Flexibility will mean something different for everyone. For an SMB retailer it can mean having small amounts of inventory stashed nearby for your best-selling skus, or having your supplier be ready to mail some in via air should you experience a surprise rush. Beyond that, keep an eye on the news and stay flexible on routings—traditional routings aren't always the best as droughts, floods, and strikes can hit any normal trade route at any time.
We hope these suggestions have given you a starting point on your own journey toward stabilizing your supply chain to deliver better long-range outcomes. Take advantage of current market conditions to build your supply chain resilience and find opportunities to maximize efficiency now. Your supply chain should be a source of value, not a source of risk—it’s time to take back control!
If you’re a fast-growth ecommerce or retail brand, creating demand is just the start. You’ll need to have an agile, resilient supply chain to eliminate backorders, waitlists, and stockouts so you can deliver on that demand. Learn more about how Flexport can help you keep your shelves stocked and customers happy with the end-to-end supply chain tracking, agility, and resilience you’re looking for.
