If 2020 was the year for pandemic-driven disruption for organizations around the globe, then 2021 is the year when those interruptions trickled down into the world’s supply chains. From product shortages to port congestion to an ocean container shortage, the number of obstacles standing in the way of an easy shipping experience seem to be mounting almost daily.
The truck driver shortage and overall labor market isn’t making things any easier for shippers that are trying to get their shipments from origin to destination in the fastest and most economical way possible. Combined, these challenges are forcing companies to get creative about how they send and receive their freight during this period of continued uncertainty.
Most recently, delays, congestion, and container availability problems began hitting the terminals in southern China (e.g., Yantian, Shekou, and Nansha) hard. During the week of May 30th, for example, Yantian’s container dwell times rose to eight days and were expected to reach as high as 18-21 days by early-June. According to Supply Chain Dive, “operations have slowed as authorities restrict business activity as they aim to stem COVID-19 outbreaks.”
Container availability dropped at the three southern China ports, the publication adds, citing data from Container xChange. And, container lines are skipping the ports of call, meaning empty boxes are not getting dropped off at the ports. As a result, Container xChange says that “many shippers will likely face long delays or higher prices for equipment if they can’t avoid using the affected ports.”
5 Steps to Take Now
The situation in southern China has been playing out across many of the world’s ports in 2021, and is being exacerbated by the ocean container shortage, truck driver shortage, and lingering impacts from a lengthy, global pandemic. While there is no silver bullet that can magically fix these problems overnight, there are some steps that shippers can take to help mitigate the negative impacts of these outside forces.
Here are five tips for working through this challenging transportation environment and preparing for a more “normalized” future:
- Stay on top of the current trends. Using resources like now that’s logistics and industry publications, you can keep tabs on the current state of the container shortage, identify the most/least congested ports, and gain a better understanding of exactly what’s happening in the markets that your company operates in. By staying informed and in the know, you’ll be better positioned to make good shipping decisions.
- Plan your transportation well in advance. Sometimes last-minute shipments can’t be avoided, but 2021 isn’t the year to leave your transportation planning up to chance. Use good demand sensing and forecasting—and talk to your customers about their future needs—to develop future-looking transportation plans.
- Have a “Plan B” in place. Knowing that the overall freight environment is more fluid and volatile than usual right now, be sure to factor rising rates, disruptions, and other potential issues into your plans. For example, if you’ve always used ocean freight and have customers that are frustrated by the long lead times, consider using air freight for those clients who have more urgent needs.
- Use technology to your advantage. Supply chain visibility platforms, control towers, and electronic logging devices (ELDs) all work together to help shippers track their end-to-end supply chains. And while these technologies were available pre-COVID, they’ve definitely proven their worth during the pandemic. If your logistics provider hasn’t equipped you with a modern visibility platform for tracking movement across the supply chain, it may be time to invest in one of your own.
- Work with a reliable, well-connected logistics partner. It goes without saying that a reliable logistics partner adds value in any business conditions, but can be more valuable than ever as you attempt to navigate an unpredictable market. “With the impacts of upending global supply chains and causing disruptions like container shortages and port congestion,” said Peter Nordstrom, DB Schenker’s Head of Ocean Product, Americas, “companies need global logistics partners to help them adapt as conditions change and as new challenges emerge.”
With no immediate end in sight to the current lineup of supply chain challenges, companies that follow this advice now will be able to more effectively ride out the storm and prepare themselves for future success.