John Scannapieco, shareholder and chair of the Global Business Team with the law firm of Baker Donelson, details the frustrations that shippers and freight forwarders are experiencing as they struggle to get products to market.
The blockage of the Suez Canal by a giant containership caused yet another series of ripple effects throughout global supply chains. It followed previous disruptions caused by the COVID-19 pandemic, economic recession, bad weather and severe congestion in transportation pipelines. Shippers have responded by attempting to get a better understanding of where potential bottlenecks exist in their supply chains, and trying to develop plans for working around them.
It’s the small and medium-sized companies, lacking the resources for exploring alternative methods of securing and shipping products, that will suffer most over the next eight to 12 months, Scannapieco says. Some shippers, especially in the automotive and chemical sectors, have even resorted to chartering giant Antonov aircraft to move their goods.
On the ground, it can be difficult even to find trucks to complete the final leg of delivery to the buyer of goods. “It’s going to require companies to dig deep and look far and wide for alternative means of transportation, if they can,” says Scannapieco. In many cases, forwarders are having to settle for 60% to 80% of their requested allocation of space, as ocean carriers cancel sailings or limit service opportunities due to a reliance on the mega-containerships, which can only call a handful of big ports around the world.
August is usually the beginning of the peak season for container shipping into the U.S., to prepare store shelves for the Christmas rush, but many shippers are attempting to bring in product early, with a willingness to pay the extra warehousing costs involved.
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