The ocean shipping industry remains abnormal in 2024, following the pandemic surge that stretched the supply chain beyond its limits. The pandemic caused the shipping industry to suffer container shortages, lack of cargo, long wait times at the terminals and rail yards, and unprecedented freight rates.
The coming year will be more of the same as the current lack of demand for imported products by an overstocked US consumer will have the same effects. Brutally, fewer containers will cause freight rates to go lower than pre-pandemic levels, which some may consider a good thing if you can live with the consequences. The lack of imports during the year will counterbalance lower export volume. Shortages of containers and equipment at inland depots that rely on imports will choke off exports. Meanwhile over stacking of containers at the port terminals will cause congestion issues.
Relief is not on the way, as container ships have added capacity this year that will outpace any increase in demand, making for a longer, drawn-out recovery process. Carriers will need to offset low volume and low revenue to minimize losses by using various strategies like slow steaming, dry docking vessels, skipped voyages and discontinuing services to secondary markets.
This gives less opportunity for US importers and consumers to move goods into the US. Unanticipated issues, like the current Panama Canal low-water situation, will only add to the delays during the year.
Barring a resurgence in demand for products anytime soon, 2024 gives the impression to be the new abnormal in shipping. Long delays, less opportunity for goods, shortages of equipment and overcrowded terminals seem more of the same. Maybe an election year and economy on the recovery can spark a resurgence of demand to help ocean shipping return to the old ‘normal’ in 2025?