The recent increase in shipping costs, caused by ocean carriers avoiding the Middle East conflict, may have long-term consequences on rates if the federal government delays intervention, warn retailers. Jonathan Gold from the National Retail Federation emphasizes the need for immediate attention to prevent significant congestion at U.S. ports in the coming months. Gold expresses concerns about the impact of prolonged disruptions on annual contract negotiations with ocean carriers, urging measures to avoid rate spikes similar to those during the pandemic. As retailers plan back-to-school and holiday import shipments, there’s a push to shift containers back to West Coast ports. Gold warns of potential congestion buildup in the next four to six weeks, emphasizing the importance of convening stakeholders and preparing infrastructure for increased cargoes. The Biden administration’s efforts, including the Freight Logistics Optimization Works (FLOW) initiative, are acknowledged for improving goods movement during the pandemic. Budd Darr of Mediterranean Shipping Co. testifies that FLOW is a positive public-private partnership. While containerized goods’ prices vary based on value and volume, the current geopolitical crisis could disrupt long-term shipping strategies, potentially altering routes and transshipment hubs. Darr concludes that adaptation is inevitable, but stability in the region may require changes in shipping practices.

Inspired by: https://www.freightwaves.com/news/red-sea-cargo-diversions-could-affect-2024-holiday-shipping