“The only sure thing in life is death and taxes” was one of my grandmother’s favorite quotes.  Global logistics is such a dynamic industry that becoming bored or stagnant is virtually impossible; frustrated, stressed, and slightly crazy is highly likely, but definitely not bored.  With the labor situation, the looming recession in Europe, and the “revenue recovery” attitude of the ocean carriers, the only certainty is uncertainty.

Despite the extension of the ILA labor contract through December 29, 2012, the threat of a work stoppage is a serious possibility.  The intervention of a federal mediator has provided hope that a new master contract will be negotiated by the end of the year.  But again, nothing is certain and supply chains in this day and age can not wait until the last minute to reroute cargo.

In Europe, the threat of a recession seems more and more imminent.  The debt problems in Spain, Portugal, and Greece will not magically solve themselves.  Trade data from both the United States and China show that exports to Europe are down.  As we now truly live in a global economy, the ripple effects of the problems in Europe will be felt in the United States as well.

The transpacific eastbound trade is another major concern for our importers.  The carriers seem fully committed to “Revenue Recovery” after successfully implementing three General Rate Increases in the first, second, and third quarter of 2012. The announcement earlier this month to assess a Port Congestion Surcharge if the ILA were to strike feels like a classic case of adding insult to injury.  Continuing to increase freight prices when there is an abundance of space contradicts the laws of supply and demand, but until a carrier falls out of line and starts slashing rates, the prices will hold.

Frustrated yet???? Who knows what the future will hold?!?! The only guarantee is that it won’t be boring.

Kristi App
Vice President – Business Development