We’ve alluded to the increase in online shopping creating shipping demand in a few blogs, but Miller’s article really explains that increase by quoting Nerijus Poskus, vice president and global head of ocean freight at digital freight forwarder Flexport, who calls the current dynamics unprecedented: The two big factors supporting this claim of demand surging because of the pandemic are increased e-commerce and the importing of personal protective equipment, or PPE.
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That’s actually how he starts his article titled “Trans-Pacific ‘going crazy’ as demand defies pandemic pessimists.” import demand that is not surging despite of coronavirus, but because of it. Not because of too little vessel supply, but because of too much import demand. West Coast container rates continue their astonishing climb. Ironically, the pandemic is part of why we’re seeing such a strong peak season right now. Last week, a new American Shipper article from Greg Miller confirmed that what I was seeing in Universal Cargo’s freight forwarding business was not an anomaly – there is a peak season happening in the importing and exporting business, and it’s strong. However, that was only anecdotal evidence Universal Cargo could be an outlier in the international shipping industry. Seeing Universal Cargo’s shipment count spike by 82% in August from the month before was enough for me to believe the 2020 peak season is really happening. I predicted we would still have a peak season however, I didn’t realize it would be as big as it is right now. Many predicted 2020 would not have a peak season at all because of economic downturn caused by the novel coronavirus pandemic.
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He posed the question, “Is this a new plateau or the start of a longer-term reversal as liner alliances bring more capacity back online?” I predicted a third option: freight rates would climb to even greater heights here in the traditional peak season.
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A month ago, Greg Miller reported in an American Shipper article that not only had freight rates finally stopped rising but they also dropped a bit.