This article was originally published on the Journal of Commerce website, JOC.com, on April 26, 2017
By Mike Meierkort, president of International Freight and Transportation Solutions at Livingston International
While the jury is still out on the impact the new ocean carrier alliances will have on international supply chains and the processing of goods at international ports, some preliminary research suggests much of North America’s trade community remains relatively indifferent to the major changes taking place.
The research, conducted by Livingston International, an international freight and transportation solutions provider and trade-services firm, reveals three quarters of respondents confessed to not knowing these changes were taking place at all. Even after being alerted to the changes, only a little more than one- third expressed a level of concern around the impact of the new cargo ship alliances.
Among those who did express concern, a modest portion plan to take pre-emptive action, such as:
- Adjusting expedite budgets to account for increases in lead times
- Contacting carriers to ensure they will be stopping at the relevant ports
- Lowering contractual amounts and working with more than one alliance
- Being sure to secure space with other carriers
- Working with a forwarder to help move containers that get bumped or delayed
- Adjusting costs in anticipation of higher pricing
The issue of pricing seems to be a sensitive one. Despite the relative ease with which the new alliances are being received, 72% expressed a high level of concern that cargo rates would increase. Such concerns are warranted and expected, but rate hikes are only one possible way costs could increase.