Navigating ocean transport pricing and capacity issues

Navigating ocean transport pricing and capacity issuesHotel Business | Hotel Business

The logistics market is a very complicated industry, to be sure, and JMC Global has been through it all. While ocean transport has always been complex, in the past year it has become 10 times more expensive and exponentially problematic.

The firm began its business exclusively as a non-vessel owning common carrier with all the appropriate Federal Maritime credentials. Over time, it has diversified into different types of market sectors such as hospitality, refrigeration, warehousing, ground service, bulk/breakbulk transportation, heavy lift logistics, FCL (full container load), LTL (less than truckload), intermodal services and small package management systems.

Now, after 15 years of operations, like all companies, JMC Global is dealing with market costs of ocean container freight that are 5-10 times or more from what they once were. This includes items from all Asian countries, not just China.

Kelly Morgan, company president, stated, “Due to worldwide supply chain problems including transportation, supply and demand are playing out in their most brutal form—unbridled container price increases.” Even with the high prices, there is not enough space to lift more than 60% of the import volume requirements that the U.S. needs to sustain its economic requirements.

The result: prices have soared by up to 200% over 2020 levels. Products, where transportation represented 20% of the cost of goods sold, have shot up by 200%.

The company pointed out that these dramatic cost increases and supply chain delays will have an immediate and longer-term impact on consumers.

Linda Crawley, CEO, said, “It is our concern that many items that the consumer normally sees on shelves will be missing altogether and many others will have much longer lead times for delivery.”

So, what is an importer supposed to do—particularly, in the hospitality project arena? Source somewhere else? There is not another country that can match the value of Chinese goods produced cheaply with low-skilled workers on a massive scale like China’s factories do now.

China represents the largest exporter of goods to Europe and the U.S. In total, it exports more than $2 trillion worth of products across these regions and that growth is not waning despite any tariff initiatives implemented by the prior U.S. administration.

So, getting space is the first critical deliverable for everyone for the immediate future. Everyone large and small has this issue, but the JMC model allows them to provide consistent answers and deliveries. “We have proven to our clients that, even in this tough market, we can provide solutions when others cannot,” Crawley noted.

  • JMC’s High Touch model offers attention to detail every step of the way and the ability to handle significant volumes.
  • JMC uses a “pull the goods in” process that is backed up by a focused technology. This allows the customer to see their goods broken down to the item and often the part basis.
  • A combination of old school personal contact and a new school app-based system allows customers to see the business their way.

The company assures that all products will arrive on time. “As soon as the PO is issued and a cargo ready date is confirmed, we make sure to book in advance in order to secure the most optimal routing and transit times on your behalf,” said Crawley. “We can provide a load plan for your project with ready dates, ship dates and delivery dates.”

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