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The established Red Sea diversion routes may have provided some clarity for companies in their supply chain planning, but it’s the duration of these diversions that needs to be factored in when strategizing for peak season.
Why? Container availability. Yes, manufacturing orders are down but, with containers out on the water longer, it delays those coveted boxes getting back to the manufacturers so they can be filled with imports. According to the latest data from Sea-Intelligence, the longer transit increases global twenty-foot equivalent unit miles by 16%.
Companies need to start planning for the normal peak season between July and October in the next couple of months. When they sit down with ocean carriers for their contracts, logistics managers need to evaluate how robust a multicarrier strategy they will need. The higher freight rates may be pulling off their Red Sea highs, according to recent data from Xeneta, but Far East to East Coast rates are up 145.5% since December 14 and Far East to West Coast rates have increased by 186.2% in the same time frame.
If containers start to get tight, rates will only go higher.
Read more in an article from American Shipper.