Shipping Delays In A Volatile Market - A Supply Chain Crunch

Supply Chain constraints continue to rise, causing shippers and carriers to face unceased bottlenecks.

Supply Chain constraints continue to rise, causing shippers and carriers to face unceased bottlenecks. The severe congestions that have been jamming the major ports of the U.S. and Europe during the pandemic are now hampering operations at a key export hub in China, which might linger until the end of June and drive up ocean freight rates even more.

The ongoing delays, blockages, and volatility are expected to become a new norm in the shipping industry. While everyone competes for the equipment, the rollover rate continues to grow. Due to equipment shortages and frequent lockdowns, freight prices are still high, with premiums to ensure space and lead times are still unpredictable. 

The global delays, which are the result of businesses restocking on a massive scale as consumer demand increases, are clogging vessel capacity, adding to a lack of sea containers needed to transport goods, and driving up shipping costs as container freight rates grow at an unprecedented rate. From mainland China to the U.S. West Coast, total transit time was roughly around 60 days; to Chicago, it's now closer to 70. 

With the recent turn of events, there aren't many ways to corner the market. However, one way to be ahead of the pack is carefully curating your freight strategy and filling technology into the loop to create a safety net for the future. 

Keep a check on your equipment at Origin. 

Shipment reports suggest delays at Origin is one of the major points of concern. Currently, it accounts for 5-7 additional days of delay per shipment.  

If we dive deeper into how technology is currently aiding the shipping industry, it is important to mention how through digital means, acquiring shipment data all in one place allows easy accessibility to supplier, consignee and freight forwarders alike. This data has allowed companies to think outside the box. Interacting with the customers, receiving and reviewing insights, visibility of schedules, drayage, and documentation has never been this versatile. Artificial Intelligence and automation allow all parties to stay informed. 

If you haven't caught up yet, the current container shortage may leave you with few alternatives. The boxes are in high demand, with spot rates rising by triple digits year over year. Certain commodities will eventually have insufficient margins to justify raising rates.

A good way to go about it is to check to see whether you can conjure up your own container by leasing boxes directly. SOCs (shipper-owned containers) can occasionally get better ocean rates than carrier-owned containers. Your freight forwarder may be able to assist you in determining when equipment leases expire, allowing you to secure the equipment you require before it's too late.

A circuitous route may be a safer bet. 

The Transpacific journey is typically safe after your cargo sets sail. The traffic bottleneck begins just outside of California and is one of the most significant challenges you will face. Delays here could jeopardise all of your logistics beyond this point.

Every week in Los Angeles, Long Beach, and Oakland is wild, with 1.5 to 2 times the volume compared to 2019. That's an additional 300,000 TEU every month, plus 150-200,000 TEU already at anchor.

Most schedules will be increased by 7 to 10 days as a result of the delays. In many cases, arrival dates are unknown until the last minute. The dwell times are also difficult. Shipment data shows that dwell times for freight catching a train out of Los Angeles can reach 20 days or more.

In times of such calamity, where congestion has brought delays, financial challenges, and capacity constraints, a little planning would go a long way. If California is showing a bit of a grey area, consider Seattle or Tacoma. You'll have to pay for the alternate mode of transit, but you may get goods sooner rather than later.

Find Chassis at Inland Ramps

Once your shipment arrives in the United States, the next hurdle is equipment. In the United States, there are around 725,000 truck chassis, which isn't a big number. There aren't nearly enough drivers, and the ones that are available are in high demand.

However, frantic chassis chasing isn't the only solution you should consider. Instead, tracking patterns across the country can help you figure out when your goods should arrive.

In April, for example, inland ramps were clogged due to surges of commodities arriving from coastal ports, where things were moving slowly at the time. As congestion continues, former hotspots may cool down.

As a solution to this problem, there exist plenty of solutions that your freight forwarder's tucking procurement team may be able to offer. They can paint a perfect picture of your next shipment route, aiding with insightful information and what not –to help you make a decision. Leave the heavy-lifting for your freight forwarder, easily manage barriers and improve your overall performance.