Major Carriers Impose Surcharges Up to $4,000 Due to East Coast Strike
In light of potential labor disruptions at U.S. East Coast and Gulf Coast ports, several leading shipping lines have announced surcharges on cargo transported from East Asia and China to the United States. These surcharges are aimed at offsetting rising operational costs stemming from anticipated supply chain disruptions.
On September 23, Maersk revealed that it will implement a Port Disruption Surcharge for all cargo to and from the U.S. East Coast and Gulf Coast, effective October 21, 2024. The surcharge structure is as follows:
20-foot container: $1,500
40-foot and 40-foot high-cube containers: $3,000
45-foot container: $3,780
Hapag-Lloyd also announced a Destination Disruption Fee of $1,000 per TEU for cargo imported from East Asia to the U.S. Gulf Coast and East Coast, starting October 19, 2024.
Evergreen will introduce an Emergency Port Surcharge effective October 23, 2024, with the following rates:
20-foot container: $2,400
40-foot container: $3,000
45-foot high-cube container: $3,000
Similarly, Yang Ming has declared a Port Congestion Surcharge commencing October 23, 2024:
20-foot container: $800
40-foot container: $1,000
45-foot high-cube container: $1,125
These surcharges are intended to mitigate the impact of strikes on the supply chain while assisting carriers in managing increased operational costs associated with port service disruptions.
Why 2024 Is a Tough Year for U.S. Sellers
For U.S.-based sellers, particularly those operating on platforms like Amazon, 2024 has emerged as an exceptionally challenging year. Sellers have cited several critical factors contributing to this difficulty, including heightened competition from Chinese sellers, increased platform fees, and evolving market dynamics.
1. Fierce Competition from Chinese Sellers
U.S. sellers contend that Chinese competitors enjoy significant advantages in price competition, leveraging lower production costs and streamlined operations to capture market share. Despite experiencing declining sales, their ability to maintain competitive pricing positions them favorably in the market.
2. Rising Amazon Platform Fees
In 2024, Amazon has increased platform fees and revised its search algorithm, resulting in diminished visibility for U.S. sellers. Consequently, many sellers have witnessed a decline in sales and profits, prompting some to explore alternative income sources, including side gigs such as ridesharing.
3. The Rise of Walmart and Temu
Walmart and Temu have emerged as formidable competitors, siphoning traffic away from Amazon. Over the past year, Walmart's seller base has expanded by 50,000, bringing the total to 150,000 and solidifying its position as the second-largest e-commerce platform after Amazon. With an estimated GMV of $10 billion, Walmart's marketplace has experienced a 30% growth in Gross Merchandise Value (GMV). The platform's relaxed approval standards for international sellers now see approximately 35% of active sellers originating from China.
4. Temu’s Rapid Growth
Temu has rapidly ascended to become the second most visited e-commerce platform globally, outperforming eBay and attracting a substantial number of international sellers and consumers. This rapid expansion further intensifies competition for U.S.-based sellers.
5. Weak U.S. Consumer Market
The U.S. consumer market exhibits signs of weakness, with forecasts predicting the slowest growth in holiday retail sales in six years, estimated between 2.3% and 3.3%, down from 4.3% last year. Personal savings rates have dipped to around 3.4%, constraining consumer purchasing power. Deloitte’s report indicates that e-commerce sales are projected to grow by only 7% to 9%, compared to last year's 10.1%, thereby increasing pressure on sellers.
How U.S. Sellers Can Adapt
In this increasingly competitive and challenging market landscape, U.S.-based sellers must adopt flexible strategies to remain competitive:
1. Diversify Sales Channels
Sellers should explore emerging platforms like Walmart and Temu to mitigate reliance on Amazon for traffic and revenue.
2. Focus on Brand Building
Investing in brand development enhances product value and cultivates customer loyalty, helping sellers avoid destructive price wars.
3. Optimize Supply Chain Management
By collaborating with multiple logistics providers, sellers can improve logistics efficiency, ensuring supply chain flexibility and mitigating operational risks.
4. Leverage Market Trends
Sellers should closely monitor market shifts and utilize data analytics and automation tools to enhance operational efficiency and adapt to market uncertainties.
How Wakool Transport Can Help Address These Changes
1. Mitigating Surcharges and Rising Transportation Costs
Wakool Transport's extensive global logistics network can assist businesses in reducing the impact of surcharges through efficient transportation planning. By optimizing shipping routes, Wakool helps businesses navigate supply chain disruptions and minimize surcharge impacts from East Coast port strikes.
2. Enhancing Supply Chain Flexibility and Efficiency
Wakool Transport offers diverse transportation options, including trucking and rail, to assist businesses in managing port congestion and delays. Its 24-hour tracking service ensures cargo safety and timely delivery, helping to mitigate supply chain risks.
3. Supporting Multi-Platform Sales
As platforms like Walmart and Temu gain traction, Wakool Transport can facilitate U.S.-based sellers' expansion into these channels, ensuring seamless transitions and reducing reliance on a single platform.
4. Optimizing Brand Operations and Supply Chain Costs
By helping sellers manage logistics costs effectively, Wakool Transport allows them to focus on brand development and enhance product value, thereby avoiding price wars and boosting competitiveness in the market.
Wakool Transport is positioned to assist U.S.-based sellers and businesses in navigating the supply chain challenges of 2024. Whether dealing with port strikes, rising freight costs, or global logistics disruptions, Wakool provides comprehensive solutions to help clients remain competitive and overcome the challenges of a demanding year.
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