The shipping industry is preparing for what many projects will be another difficult peak season, as shipping and logistics interests try to prepare for increased demand.
Peak shipping season generally begins in mid-August and lasts until mid-October. This period, due in large part to the upcoming pressure on retail during the holidays, is often characterized by high demand, low supply and limited container capacity, which generally results in higher freight rates. However, with the impact of the coronavirus pandemic, the industry over the past three years in both early and late season has been far from the norm.
As the global economy adjusts to the pandemic and territories ease restrictions, an increase in demand is expected to further challenge the supply chain. For some, including Neil Smith, vice-chairman of the Shipping Services Limited group of companies, this year could be even more difficult than the last, when a shortage of containers, closures and bottlenecks at ports led to significant delays in shipments.
Smith said: “I expect to see an increase from last year’s peak. With the reopening of the tourism industry and the continued growth of the BPO (business process outsourcing) sector, more disposable income is being generated, which will lead to increased retail, local and online sales.
For importers who must anticipate the rush in consumer demand, the coming weeks will be very important for their businesses. “Importers can expect the usual delays, especially in Montego Bay, and higher freight rates,” Smith said, warning that they “should also be on the lookout for ephemeral shippers overseas. offering low freight rates”. Many importers flock to the low rates and then find themselves looking for where their cargo is.
“These shippers can collect freight charges and customs duties in advance and run away with the money, forcing the importer to duplicate payment in order to get their goods released.”
He advised that “Importers should look for experienced freight forwarders who can explain to their customers any delays to be expected and route them to another port if time is a factor.”
The outlook for freight charges, given the congestion and delays that continue to occur at some ports around the world, is far from optimistic.
“As oil prices rise, freight costs will rise with them. In addition, when the factories in China reopen, there will be an overwhelming demand for containers in the East, which will also lead to a shortage of equipment available on the routes from the United States to Jamaica, which will lead to increased freight rate,” Smith said.
Smith continued, “Congestion is generally only a problem at airports and at ports and warehouses in Montego Bay. Thanks to Customs’ implementation of multiple technological advancements in their system, wait times in warehouses have been significantly reduced, while making the process more transparent.
Nevertheless, importers can always plan ahead to avoid the worst of peak season.
“Importers should ship early (September or October), if possible, to avoid the rush. For those traveling for the holidays, I would recommend that they speak to their freight forwarder and ask for realistic lead times, as well as service information door-to-door. The best option might be to ship the goods to Kingston and truck them to the desired end location, so we can meet the desired timelines.”