Shipping costs were at a six-year low in 2017, and with the continuing decline of freight costs, it may be time to look for a full-time freight management company so that you can concentrate on running yours.
Moore Stephens is a global shipping consultant who reported that total annual operating costs fell by 1.3 percent in the shipping industry. Add that to a 1.1% fall in cost noted for 2016. For the third year in a row, 2017 saw all categories of expense decline in the prior 12 months, mainly in stores and insurance.
The findings themselves can be seen in the so-called OpCost 2018. This cost benchmarking tradition, produced by Moore Stephens, shows the total operating costs for the bulker, tanker and container ships, all down in 2017. When reviewed from a year over year perspective:
- Tanker index fell 3 points, or 1.7 percent
- Bulker index fell 3 points, or 1.9 percent
- Container ship index fell 2 points, or 1.3 percent
- Crew costs for the container ship sector had no real changes, compared to the 1.1% decline from the previous year.
- Expenditure on stores declined by 3.5 percent
How Can You Capitalize on the Declining Prices?
With carrier consolidation looming on the horizon, now is a great time to look into a freight management service and lock in an advantageous contract. Once one of the large carriers makes a move on a competitor, the entire seascape changes. Luckily, if you get the ink on the paper now, any cost changes will probably drag out until any current contract expires. This makes it more important than ever to partner with the right carrier.
What are the Expected Trends for the Freight Industry?
Expect to see additional capacity added in 2019 from Evergreen, COSCO, OOCL and CMA-CGM. This will likely affect larger vessels traveling from Europe to Asia. From the perspective of stability, overall demand may still lag capacity. This suggests that it might be harder to find available shipping and costs will go up unless you’ve locked in a great deal prior to that.
Shipping customers should take hold of the situation and not allow the availability of cargo space to take away their ability to secure an advantageous contract.
Expert Freight Management Services
World Trade Distribution Inc. features freight management services in Houston, Texas. Our services include container management, import freight handling, export freight and storage and warehousing.