The condition of the maritime sector can be seen as a mirror to where the whole global economy is going. Would we see a crazy boom during the upcoming Peak Season? How are retailers getting ready and what are their expectations? We spoke to Glenn Koepke, VP & GM Network Collaboration, at FourKites, about how consumer spending is affecting the sector. You can watch the full video interview below.
Glenn, how would you evaluate the maritime industry’s performance in the beginning and the middle of 2023?
It was a double edged sword. There was a lot of good but also a lot of challenges too. Overall the service metrics (such as on-time delivery and dwell times) have been very good but there is a reason for that. Demand is low and pricing is at rock bottom.
The costs of operating are the same but profits have gone down and in some cases pricing has gone down by up to 50%. Shippers have reaped the benefits of significantcost reduction and better on-time service.
How is this going to impact the rest of 2023 and beginning of 2024?
Spot freight rates have started to go up slightly as pricing has hit its bottom. We will see pricingrise at the end of Q3 and beginning of Q4. We will see dwell time increase slightly but nothing that would cause problems. General demand will also increase a little bit.
We are nearing the Peak Season. Are supply chains ready for it?
From a consumer perspective spending is slowing. A lot of US and European retailers have enough stock. They are anticipating around 2 to 4% growth but it will generally be slow. For the maritime sector this means a steady increase in volumes for the next 2-3 months without any major swings.
There will be niche cases like discount retailers that may buy a specific product at the last minute. In general the low consumer spending will translate into mediocre volume increase in both Europe and the U.S. but if we translate that to the end consumer, there will be more products available on shelfs and online during the peak buying season which is a big change from the last two years.
You can watch the full video with Glenn Koepke, VP & GM Network Collaboration, at FourKites, now to learn where global supply chains are moving to, what trends will reshape the maritime sector in the coming years and more. ✷