Last year, shippers were faced with increasing rates as carriers recovered from profit loss and limited space on vessels as carriers reduced capacity. The hope was that in 2010, things would pick up. Unfortunately, it doesn't look like that will be the case. As discussed in this opinion piece from Supply Chain Brain, carriers will only be adding capacity if they see significant market growth (which hasn't happened yet). Delayed shipments can also be expected, as carriers make service changes to conserve fuel (the on-time deliver rate in 2009 was only 55%!)
The article ends by posing the following question:
So, for 2010, how will shippers react? Will they sign long-term contracts or just extend current contracts until the market stabilizes? Will carriers, again, continue to increase rates or will competitive forces stabilize rates? My bet is rates will rise and 2010 will again be a year of challenge.
Hopefully 2011 will bring us some good news! Please visit SupplyChainBrain.com to read the full article: Ocean Freight Rates Predicted to Continue to Rise in a Challenging 2010.
