The realities of supply and demand in global shipping

The holidays are shipping. In other words, Chinese-made gifts for the holidays—everything from electronics to furniture, from toys to clothing—are already crossing the Pacific in container ships bound for United States ports.

This means the new tariffs on Chinese goods are only one of the many issues importers now face—and it may not be the most challenging one today. Much more immediate problems are higher shipping rates and capacity reduction. In an effort to generate as much income as they can in the next 90 days or so, carriers are going to emulate the pattern established by the airlines. That is, they’re going to decrease capacity in order to create scarcity and therefore a reason to raise prices. This artificial supply and demand imbalance is a significant challenge right now in the Transpacific trade.

Companies who need to import goods to the US need an advocate, a partner with deep experience and the know-how to navigate the season, to make sure product arrives where and when it needs to. This is yet another reason technology won’t change the industry: tech can’t book a ship—people can.

“Customers often don’t see what’s happening in the industry at a macro level beyond their immediate supply chain, and they don’t have to. At Laufer, we see that bigger picture and communicate to our customers, helping them make better decisions about how to maintain the integrity of their supply chain,” says Michael Van Hagen, Laufer’s Vice President of Sales and Marketing. “The unique perspective we have on the market and the relationships we have with our carrier partners enable us to help our customers navigate these complexities. Just as our carrier partners do, we focus on both imports and exports. For every four containers we bring to the US from China, we send two to three back with cargo. This instantly transforms a carrier’s one-way trip into a much more lucrative round-trip. We provide them income in both directions, so there’s real value in that relationship.”

In an environment when shipping capacity is at a premium, success is defined by getting goods to a certain location by a certain time. Laufer builds on its relationships with carriers to afford its customers more options as they ship for the holiday season and throughout the year.

 

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