The logistics industry remains in a state of uncertainty as we head into 2024. With the crisis of the pandemic behind us, OSRA-22 in place and massive carrier capacity coming into the market, we’re still not on steady ground. Will we enter another stretch of low rates and overcapacity, or will carriers have the discipline to manage capacity and stabilize rates? Will there be a final rulemaking for billing demurrage and detention in 2024? I see these two areas as prime challenges ahead.
In our world of beverage alcohol, most of our trade is in traditionally stable lanes — the trans-Atlantic, Oceania and South America. When I see contract rates dropping below $1,000 in the westbound trans-Atlantic lane, I wonder how low carriers will go. Is this balanced, stable trade lane doomed to suffer the same volatility as the trans-Pacific market?
With that said, the state of ocean contracting has become more of an art than a science. We try to predict and react to market changes, keeping an open door with our carriers to review, assess and adjust. Tight relationships with our carriers remain crucial during this time of overcapacity and volatility. We honor the “intent” of our contracts, yet they must be dynamic. Thus, ocean contracting remains one of the most challenging areas for 2024 and getting to a new “normal.”
The second area we expect to see continued rough water is in the roll out and enforcement of OSRA-22. The results of the rule making on demurrage and detention billing practice remain pending. The US Federal Maritime Commission is realizing how complex the supply chain is and how many parties have opinions about D&D billing.
As part of the National Shipper Advisory Committee, I interact with industry experts to put forth comments reflecting a range of industry interests. Demurrage and detention remain a problematic area and will remain so until we have the final rulemaking and the data visibility that is needed to support the process.