This guest blog is provided by David L. Buss, CEO of DB Schenker USA.
Though the COVID-19 pandemic began to ease at the end of 2020 and in 2021, the effects are still felt in 2023.
Following a boom in consumer goods demand and increased congestion, shippers have struggled to locate capacity and address the challenges of space, container, and labor shortages. As a result, logistics companies have to find more innovative approaches to supply chain disruptions.
Here are some tips for navigating through global port congestion and the ocean container shortage.
1. Do Your Research and Understand the Bigger Picture
Keeping up with trends using industry publications and news sources helps you stay informed of the potential disruptions in the supply chain. Pay close attention to the markets you operate in to make strategic decisions.
With global supply chains and global factors contributing to congestion, it’s vital to analyze global trade patterns and gain insight into current port congestion. Knowing what obstacles lie in your path keeps you agile and adaptable.
2. Check Your Supply Chain
Along with the global state of the market, keep an eye on your own supply chain. Supply chain visibility platforms and electronic logging devices (ELDs) can help you track your end-to-end supply chains.
If you notice dramatic changes in rates or availability, have a contingency plan in place to prepare for disruptions to your shipments. For example, you may prefer ocean freight, but if you have urgent shipments, opting for air freight may be the better option.
3. Make Use of New Technology
Technology is an essential part of adapting to the ongoing supply chain disruptions. As mentioned, supply chain visibility platforms and ELDs help with tracking your shipments end-to-end – a necessary tool in the midst of pandemic disruptions.
You could also look to technology for your own operation. Automation is revolutionizing industries by relieving the burden of manual tasks. This not only frees humans to do the work that only humans can, but it improves your overall operational efficiency.
4. Find Alternate Routes
Though many major ports are experiencing congestion and capacity issues, that’s not true of every port. Some of these ports have space and capacity to service smaller ships, giving you an alternative option for some shipments.
On the West Coast of the US, Seattle, Tacoma, Portland, Oakland, San Diego, Vancouver, and San Francisco provide options outside of the major shipping routes. The East Coast is over capacity in major ports like New York and Miami, but there are options in Philadelphia, Palm Beach, Jacksonville, Wilmington, Port Everglades, Baltimore, Boston, and Norfolk.
Finally, the Gulf of Mexico has some US ports, though they may require transloading services. These include Houston, Mobile, Gulfport, and New Orleans.
Though these ports may have lower transit times or low-cost options, they won’t satisfy every shipment. Consider air freight for high-priority orders if the ports are congested or the capacity is low.
5. Be Prepared to Adapt
With freight so volatile, it’s important to have a contingency plan in place that considers rising rates, port delays, disruptions, and other obstacles. The more prepared you can be, the better you’ll be able to keep your shipping running on time.
It may take some creativity. Even if you prefer ocean freight, for example, that may not be an option for every customer. Look into your other options, including air freight or intermodal solutions, for high-value shipments.
"With freight so volatile, it’s important to have a contingency plan in place that considers rising rates, port delays, disruptions, and other obstacles"
6. Keep Your Contacts Updated
Connecting with key players in the supply chain, such as carriers, shippers, customs brokers, terminal operators, railroads, and truckers can help you monitor global shipping patterns and market trends that may impact your operations.
Be sure to maintain consistent communication with all parties involved in your shipping routes. As information comes in, adjust your operations to adapt to changing circumstances.
7. Watch Out for Hidden Costs
Demurrage, a charge applied to containers that are left at the port longer than their allotted time, can add hundreds to your shipping costs. Each port has its own policies regarding demurrage, so it’s important to monitor – and avoid – them whenever possible.
Fortunately, staying informed is a key step in avoiding these charges. When you plan ahead or make alternative plans, you can ensure that there are enough resources to handle your containers and keep the shipments moving.
8. Partner with Local Service Providers
As the world adapts to ongoing port congestion and delays, it’s only become more crucial to have a third-party logistics partner with the resources, experience, and capabilities to weather the disruptions. Having a strong partner is invaluable for navigating this volatile and complex market.
What’s Next for the Global Supply Chain?
Though the container shortage has been one of the biggest issues supply chains are facing, the future's looking brighter. Freight prices are expected to decrease, though not to pre-pandemic levels, and consumer demand is easing back. These issues are likely to continue throughout 2023, but with those factors, it may begin to normalize in 2024.