This commentary appeared in the print edition of the Jan. 6, 2020, Journal of Commerce Annual Review and Outlook.
If you like to wake up, peek at your calendar, and know exactly what the day is going to be like, you’re probably not in logistics, and certainly not in international logistics.
Prior to 2019, industry leaders were awakened by ocean carrier alliance noise, port slowdowns, a cyber-attack, and an unexpected carrier shutdown. This year was fraught with tariffs, accompanied by tremendous focus on how to mitigate tariffs, including changing sourcing origins to countries lacking in infrastructure. As we all know, tariffs may disappear or increase, making budgeting and forecasting difficult to accomplish.
That said, the ocean carrier alliances are finding their groove. We’re seeing steady improvements in service and financial stability. Ports are also behaving nicely, which we appreciate and never take for granted.
As we look ahead, IMO 2020 is on the top of our watch list. While there are a few insightful industry white papers on IMO 2020, the exact impact it will have on the industry is still unclear, and beneficial cargo owners (BCOs) are just “guesstimating” the cost impact.
From a regulation perspective, we’re tracking California’s AB 5 law that goes into effect on Jan. 1. Although dubbed the “gig worker bill,” it could potentially reclassify independent owner-operators as employees, dramatically impacting dray carriers. BCOs should ensure they have the appropriate mix of dray carriers to mitigate their risk here. As we’ve seen before, what happens in California often travels to other parts of the country. In fact, New Jersey is already debating S4204, which has similar stipulations to AB 5.
In this business, we may not know how our days will unfold when we look at the calendar each morning, but we know enough to buckle up for what is sure to be an exciting ride.