Articles by Month: June 2022
A new law promises sweeping changes to the ocean shipping industry following more than two years of port delays, congestion, and growing consumer costs. The bipartisan act has several goals. These include:
- Promotion of U.S. shipping exports.
- Limiting ocean carrier market power (thereby reducing shipping costs, which have risen dramatically this past year).
- Improving supply chain efficiency overall.
As our Cleveland warehousing and trucking professionals can explain, the Ocean Shipping Reform Act is the most significant overhaul of shipping regulations in nearly 25 years. The precise impact it will have on Northeast Ohio supply chains isn’t crystal clear, but there is almost certain to be a ripple effect.
Many shipping companies have lauded the measure as a substantial step in the direction of addressing the growing list of shipping disruptions in recent years, including not only astronomical fees, but a lack of containers fit for agricultural exports.
However, much of the law’s effectiveness is going to come down to the Federal Maritime Commission, which has the authority to regulate the shipping industry, but with limiting funding, has always been slow to do so. The law does empower the agency with more enforcement power to investigate and penalize unfair practices. However, even the head of the FMC acknowledged to Supply Chain Dive that the law is “no silver bullet” and there may only be so much the feds can do to check shipping port congestion and soaring costs driven by supply and demand.
Supply Chain Delays, Congestion Drive Up Costs
Virtually all supply chains are subject to some degree of volatility, to varying extents. That’s why our 3PL Cleveland warehousing and trucking team is prepared at all times to forecast sudden shifts and changes and quickly adapt.
But federal legislators have been under intense pressure to do something as global supply chains have been disrupted and erratic ever since the start of the pandemic more than two years ago. Unpredictable schedules have thrown off regular business operations, resulting in higher prices for transportation, even amid big delays.