By Nick Lung.    Photo：Chanaka

The "craziness" of the US lane during the epidemic can be said to be a once-in-a-century event. The strong demand that has lasted for two years has completely exceeded the processing capacity of U.S. infrastructure (terminals, trailers, warehouses, etc.). Terminal congestion has "digested" 10-15% of the transportation capacity, indirectly leading to further reductions in transportation capacity, and congestion in all aspects of the U.S. end. This has led to a shortage of various equipment, and everything from empty cabinets to racks have become hot commodities.

Under this market situation, American Lane Freight Forwarding has ushered in the best time. The shipping company has made excess profits, and the freight forwarder is certainly not bad either. At that time, the American lane freight forwarders who had space in their hands made quite astonishing profits per container. Even the bosses of many small and medium-sized freight forwarders have achieved financial freedom early, and many freight forwarders have also taken the opportunity to sell their goods at the best time and at a good price. The scenery of American lane freight forwarding is unparalleled for a while.

For the same freight forwarders, sometimes the gap is still huge. Back then, most freight forwarders with a large number of shipping spaces signed contracts directly with shipping companies. Due to various reasons, many freight forwarders engaged in American lanes do not have the experience and ability to sign contracts. More importantly, they have not had their own contracts for many years, and the problem is not big. However, the benefits of signing directly with the shipping company will be fully reflected in 2021, and this difference is also reflected in wealth. The problem is that freight forwarders who are aware of the benefits of signing a contract want to sign a contract in 2022. The shipping company's view of the market at that time was that it was a seller's market. The threshold for signing a contract was very high. Many freight forwarders who wanted to sign a contract may not have the opportunity to sign a contract with the shipping company.

The time has come to 2023, and now is the critical moment for American Lane to sign. In just half a year, the market situation has changed dramatically. From a seller's market to a buyer's market, the sharp decline in cargo volume means that shipping companies are more open to signing new customers and new freight forwarders. This year is a good time to sign contracts with shipping companies.

Of course, the current US lane is full of difficulties. The sharp drop in freight prices has caused freight forwarders' profits to return to normal. The era of huge profits has long ended. So is it necessary for freight forwarders to sign contracts themselves? This is a short-term and long-term issue. In the short term, the market is currently in a period of turbulence and adjustment. The future is indeed full of uncertainty. Shipping space is not an issue. The peak season seems far away, and the urgency of signing a contract is not obvious. However, one thing is certain: the current situation is abnormal, and the US lane will one day return. In the long term, the US lane has always been the most important single market in the world, with huge potential. For players who are prepared to work in the US market for a long time, this year may be a good time to sign a contract. When the market is booming, the window for signing a contract is small, the starting point is high, and many resources are out of reach. The current market is difficult for everyone, but many resources have been liberalized, including contracts with shipping companies.

One of the biggest differences between the American Lane and other routes is that it has many technical barriers and compliance requirements. American Line is regulated by the FMC (Federal Maritime Commission) and has strict regulations and qualification requirements for the different roles played by freight forwarders. If the freight forwarder decides to sign a contract with the shipping company, it must have an FMC bond and issue its own bill of lading. FMC has a strong crackdown on illegal activities. Especially after the OSRA2022 (U.S. Maritime Reform Act) was passed last year, FMC received enough budget from the federal government to expand its enforcement team and strengthen its crackdown on illegal activities. Companies that are found to be in violation will be banned by FMC. Huge fines are issued, ranging from hundreds of thousands of dollars to millions. To become bigger and stronger in the US, compliance is fundamental. With FMC bond, the freight forwarder also needs to solve the AMS/ISF sending problem. These are very necessary but cumbersome steps.

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