I have tough news for freight shippers yearning for relief in their global transportation network: It’s going to get worse before it gets better.
That’s the unfortunate truth, especially as we’re in the holiday shipping season, and the gap between freight demand and transportation supply continues to widen. The world has only a finite amount of equipment, particularly containers and chassis, and the pandemic and parts shortages have ground to a halt the manufacturing of much-needed new equipment.
Freight continues to pile up off West Coast ports, and increasingly at those in the Gulf of Mexico and on the East Coast as well, and shippers, ports, terminal operators and drayage carriers aren’t prepared to handle it. Moreover, the distorted cycles we’re operating in are only causing further delays. For example, a container bound for the U.S. from China in the pre-pandemic market used to take about two months to return to China for re-export. That cycle is now three months. Since the import-export market relies on those cycles, a delay at the end is a delay at the beginning, and vice versa.
Containers are slow to be recycled because of the demurrage and detention situation at the ports. Due to a lack of visibility into their cargoes, shippers are being forced to scramble to dispatch drayage carriers (which are also in short supply) within short windows. And the warehouses to which drayage carriers haul import freight are overflowing as well.
For freight shippers, this is a swirling storm of problems that can turn even the most efficient supply chain and transportation network into a mess.
Here’s some advice: Accept that these complications are completely out of your control. You can’t create more containers. You can’t build more chassis. You can’t increase drayage capacity. You can’t open up warehouse space. You can’t speed up container turn-around times.
Instead, focus on the one thing you can control: your company’s efficiency. That means finding the right partners and infrastructure that support that objective, then working as far in advance as possible to plan your freight’s movement and its port of entry.
Rather than being reactive to the market situation, become more proactive. The shippers that plan ahead give themselves time and opportunity to sort out problems as they arise, and possibly avoid some hassles entirely.
Take the recent example of an importer with a large volume of containers coming into the Port of New York and New Jersey. The port was becoming more congested on a daily basis, and with the holiday shipping rush approaching, problems with drayage carrier and chassis availability were looming.
Having identified the problem about six weeks ahead of time, the importer was able to divert its freight to an alternative port within the vicinity of its distribution-center network. The Port of Philadelphia fit the criteria, and the freight was routed there instead. In the process, the importer was able to sidestep the chaos in New York, avoiding demurrage and detention charges, and its product arrived on shelves much more quickly.
You can’t change the system right now. What you can do is work on your efficiencies and focus on what you can control. In a landscape with so many elements outside of your control, many of which present major hassles and hurdles to getting goods to where they need to go, it’s essential to find proactive approaches.
With this approach, you might be able to shave weeks off your freight’s transit times, reduce your demurrage charges, and avoid some of the frustrations of today’s maritime market.
Nimesh Modi is chief executive officer of BookYourCargo.
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