Air cargo rates rise, TikTok overstays its US welcome at last, and effects of key bridge collapse hit shippers hard in April
Greetings everyone,
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Air cargo demand has surged thanks to Red Sea shipping disruptions and demand from Chinese e-commerce giants sending orders to the West, the effects of the Baltimore bridge collapse become apparent, and marketing strategies shift as the law in the US banning TikTok is signed into effect.
What else happened this past month in e-commerce logistics? Let’s get into it.
Air cargo demand resurging as shipping pause in Red Sea continues.?
In order to avoid the dangerous Red Sea situation, some retailers who need more reliable and fast shipping are opting for air freight, pushing rates up to double digits for the fourth month in a row.
Global rates are also being pushed up by Chinese e-commerce giants like Temu and Shein shipping deliveries to western buyers. However, even if rates have grown quickly since the beginning of 2024, they are not growing uniformly around the world, and they only look high when compared to the lows of 2023.
Most businesses are assuming that these rate hikes will be short-lived, and are opting for short-term capacity purchases instead of signing long-term contracts.
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After effects of the Key Bridge collapse coming into view
More than a month later, there is still no estimate yet on when the wreckage of Baltimore’s former Key bridge will be cleared out of the Baltimore Harbor. Baltimore is one of the US East Coast’s most important shipping ports, and experts estimate the weekly impact of the port closure at around 1.7 billion USD based on figures from 2023.
With no return to normal in sight for the port, shippers have been forced to find new routes for the foreseeable future. There are plenty of nearby port options, from New Jersey in the north to Virginia just south of Baltimore, that have made clear their ability to handle the extra capacity.?
However, making these changes takes time, and rerouting is costly. Notably, several major shipping lines have declared force majeur — meaning they will not be held responsible for the added cost of rerouting, and are instead passing that extra fee on to their clients.
The situation affects truck transport too, as the alternate route tacks on about 20 minutes to their journey. Particularly considering how high costs are, it’s an expensive problem for those who ship to the area, and it’s unlikely things will improve for the next 3 to 6 months or so.
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Alibaba aims to bring a whole new meaning to rocket-fast delivery?
Alibaba has teamed up with rocket-making startup Space Epoch to create a delivery rocket. Although “delivery rocket” sounds like a gimmick from a bad sci-fi movie, the company has confirmed on its Weibo account that they are genuine about testing the delivery medium, with the goal of achieving 1-hour delivery anywhere in the world.
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Whether or not the rocket delivery is successful — or even practical— it would certainly give Amazon’s same-day delivery a run for its money.
US TikTok ban
This past month, President Biden signed the law prohibiting apps owned by foreign adversaries — read, TikTok.?
Considering that Bitedance, owner of TikTok, has no plans to sell the US part of the business to a US-based company, it looks like TikTok will really be a banned app after the expiration date (which is around 180 days out at this point).
This could rock marketing campaigns for many e-commerce retailers, as TikTok has become an important pin in the social media marketing strategies for many retailers.
It is a loss of marketing channel for many, which is why it’s important for retailers who use the app heavily for marketing to spread out to other marketing channels.
Overreliance on a single channel for marketing and sales can hurt your brand in the long run. Social media apps are born and die in a cyclical way; spreading marketing efforts across multiple channels helps you create a more sustainable marketing plan.
For those relying heavily on TikTok for marketing in the US, consider spreading your efforts out to the following channels before the year is up.
From CBIP?
We’ve published the following blogs this last month. Give them a read if you have a couple of minutes.
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Want daily updates from CBIP? Make sure to follow me via Twitter (@Nbartlett_CBIP) and CBIP (@CBIPLogistics) for thoughts and conversations on the industry every week.
Until next month,
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Nick Bartlett
Co-Founder at CROSSNET | Forbes 30 under 30
9 个月We switched from CBIP to SEKO Logistics and were able to reduce our storage costs from $9AUD per week to $4.5AUD per week and our outbound shipping costs reduced 30%. If you are a client of CBIP or potential client and looking to save money I am happy to refer you to SEKO.