The Perfect Storm in Global Shipping
The global logistics shipping industry, from domestic trucking to international air and ocean transportation, is experiencing a whirlwind of upheaval and change. Driven by the political climate, changing consumer demands and labor shortages, manufacturers and shippers are being called on to solve unprecedented challenges all while rates are down and service demands are increasing. With global shipping becoming increasingly difficult to navigate, logistics professionals will have mountains to overcome in the coming years.
While NAFTA negotiations continue to loom over our heads, people in and outside of the transportation industry are fearful of the impact. The loss of trade benefits could be devastating, should the United States pull out of the deal. It’s a similar situation with potential trade tariffs for China and Brexit in the works. It’s yet unclear how the shifts in trade agreements will affect the global economy and shipping industry.
Already affecting the industry: ecommerce. Merchants selling online are generating more sales, but increased business creates challenges in consumer demands and logistics. Ecomm shoppers want faster and cheaper – if not free – delivery. And they expect it to be an experience. Further, the state of the global shipping industry will greatly impact our ability to trade and ship from manufacturers outside of the United States.
On the national front, the United States is experiencing a trucking crisis with a driver shortage. The effects are already being felt, with delivery delays and higher costs to transport. Driverless cars and trucks are on their way but technologists don’t agree on how quickly that day will come.
Commerce flowing in and out of our homebase in Portland has also been impacted by the struggles experienced at the Port of Portland. With the existence of 2000 TEU carriers, and a number of other factors, the Port of has been unsuccessful in attracting ocean freight carriers. The port has shifted its focus to a mixed-use model in order to serve a more diversified client base. To move products overseas, the Port has partnered with BNSF Railway to transport goods north to Seattle-Tacoma to be shipped overseas.
By air, water or land, the transport of goods is crucial to our economy and way of life. Transporters are being challenged in the current environment and where it will turn is yet to be seen. Despite the mounting challenges in the transportation industry, there’s enormous opportunity for innovation and growth. Those who adapt to the changes will come out on top.
American Warehouse can help navigate your logistics, contact us today to learn more!