What a year for the shipping industry! We faced trucking shortages, embargoes, trade tariff hikes, reduced capacity and much more. A wise man once said, “I can’t change the direction of the wind, but I can adjust my sails to always reach my destination.” Our members and industry experts share their thoughts about the winds of development that were most impactful in 2018 and what their projections are for 2019.
What was biggest development within the industry in 2018?
“Electronic logs and their impact within the freight complex. Truckers of all kinds are in short capacity this year because of the reduction in hours. The new regulations limit productivity, efficiency and throughput for all kinds of freight. Not to mention it’s an added cost for everyone involved to get their goods from one place to another.” – Joe Caruso, Export Trader, Stone Arch Commodities
“An unprecedented front-loading pattern in July/August as well as October/November to beat the tariffs. Couple that with capacity withdrawals, and weather impacts at both origin and on the USEC; it was an incredible year.” – Michael Bauer, Manager of International Trade and Customs, Moen
“The tariff conflicts between the US and China.” – Dave Briggs, Director, TSC Container Freight
“Lack of space on ships and tariffs caused freight rates to skyrocket and continue past the busy season.” – Michael Siegel, Vice President of Imports, The Tin Box Company
How did you use NYSHEX in 2018?
“We predominately used NYSHEX as a risk management tool for forward rates. There has been so much volatility with freight (carrier consolidation, fuel, record imports) it was nice to be able to have some confidence on some lanes and book them ahead of time. Especially for lanes that we are most consistent with. – Joe Caruso, Export Trader, Stone Arch Commodities
“We used NYSHEX to remove rate volatility and secure guaranteed equipment and space.” – Dave Briggs, Director, TSC Container Freight
“We initially used NYSHEX for spot buy plays where rates were cheaper than contracted; however, that changed the second half as NYSHEX was used to secure needed capacity.” – Michael Bauer, Manager of International Trade and Customs, Moen
“I used NYSHEX if they had a lower rate than what I was paying, or I needed to guarantee that my container does not get bumped.” – Michael Siegel, Vice President of Imports, The Tin Box Company
What are your projections for the industry and plans for NYSHEX in 2019?
“I think freight will continue to be tight – carriers are still not making a ton of money, fuel is continuing to increase quarter by quarter as carriers ramp up for the low-sulfur changes in 2020 and, I think, the massive amount of imports in the second half of 2018 could make for an interesting Q1 of 2019 when it comes to inbound empties both before and after the Chinese New Year. There are a lot of unknowns in 2019 and they don’t necessarily point to lower freight rates. We would like to continue to utilize NYSHEX in the same manner we did in 2018 – feeling more confident about booking freight further out, guaranteeing space and a shipment window. The take or pay model is something we are an advocate for. We intend to grow our usage of NYSHEX as we continue to expand our export footprint out of Chicago and Minneapolis.”” – Joe Caruso, Export Trader, Stone Arch Commodities
“More animosity between carriers and shippers. Shippers are upset about how carriers left their contracts to take higher paying freight. Now carriers are implementing new Fuel Surcharges without showing the math and claiming it is for IMO 2020 which is a year away. We will continue to utilize NYSHEX as we did in 2018 and likely reduce contracted volume to have more containers available.” – Michael Bauer, Manager of International Trade and Customs, Moen
“I am projecting another down year for our industry. On line business is taking away business from the actual stores. If less people are going to stores, the less they buy the product in my industry.” – Michael Siegel, Vice President of Imports, The Tin Box Company
“There is still a capacity glut and the rate environment is still weak. There will be rate disruptions as carriers try to implement new bunker methodologies due to the Low Sulfur mandate. Supply and demand will ultimately determine rates, but we expect more rate volatility in 2019. We will use NYSHEX as we did in 2018.” – Dave Briggs, Director of TSC Container Freight
Who knows which way the 2019 winds will blow? One thing you can count on however, is for NYSHEX and our six carrier members to be there with guaranteed contracts for the moments when shippers need to adjust those sails.