The Weekly Roar

In this week’s Roar: a Red Sea update, a new Ocean alliance, freight shipments down in December, challenges and changes in the supply chain, and perspectives on visibility.

Not surprisingly, the situation in the Red Sea is having far-reaching implications. Retailers are being forced to take up defensive maneuvers and change their supply chain strategies since the rising cost of shipping is making it difficult for them to keep products on the shelves. Some are looking at alternative methods of transportation, such as air freight, which is more expensive but faster than shipping by sea. Others are cranking up inventory levels, so they’ll have more products on hand. Still others are redressing nearshoring. All in all, this is yet another reminder of the importance of having a flexible and adaptable supply chain.

Another shakeup of global liner alliances is on the horizon. Maersk and Hapag-Lloyd have formed a new agreement called the Gemini Corporation, which will launch in February 2025. It’s predicted that this new entity will have a negative impact on existing alliances, particularly THE Alliance and the Ocean Alliance. In order to stay competitive, other carriers may need to find new partners or change their service offerings.

Freight shipments and expenditures in the U.S. were down in December when compared to the previous year. According to the Cass Freight Index — which many in the industry look to as a barometer of freight and market conditions — put December’s shipment reading down 7.2% annually. November’s decrease was 8.9%, and October’s was at 9.5%. This lines up with the drop in U.S. freight volumes over the last two years.

It seems the supply chain has dealt with unending challenges and changes lately. The pandemic forced companies to quickly adapt and change their supply chains because traditional processes just weren’t working anymore. It’s now more apparent than ever that resiliency needs to be built into supply chains. And companies with an eye on the future are taking steps to utilize generative AI and revolutionize their practices.

There’s a growing need for supply chain visibility to expand beyond the simple tracking of orders and shipments. A growing list of other issues is calling for visibility and transparency. Issues like the increasing number of laws and regulations that require companies to track greenhouse gas emissions and forced labor throughout their supply chains. Fortunately, companies can comply with these regulations in several ways, and many are looking to generative AI as a means to map their supply chains.

For the rest of the week’s top shipping news, check out the article highlights below.