As the recovery from the global pandemic continues, there is plenty of talk about capacity shortages, driver shortages, inventory shortages and all manner of other deficiencies throughout the international freight chain. One thing not mentioned often enough is the growing issues of shipping container shortages in many regions. Shipping containers are the lifeblood of world trade as every item, product, or part that ships out gets loaded into a container. However, recent trends and habits among shippers and carriers have led to extreme shortages and delays. As reported by The Washington Post, “The worst choke point is in Southern California at the ports of Los Angeles and Long Beach, where 62 container ships carrying toys, electronics, furniture and other goods lie at anchor waiting for an unloading berth. The floating queue, virtually unknown before the coronavirus pandemic upended global supply chains, has doubled since mid-August.”
Asia-based exporters say the wait time for the containers needed to ship goods to Europe and North America can extend to three weeks or longer. British exporters say the wait time for containers going in the opposite direction to Asian and African locations can span more than two months. In addition, container prices have nearly doubled, adding even more strain on an already over-taxed global supply chain. Something has to be done to reduce turnaround times and improve access to containers when and where they are needed. Here are some suggestions.
Take Advantage of Freight /3PLs With Pending Capacity
At the heart of shipping container shortages lies a simple truth—there’s a stark imbalance within global trade processes. This imbalance has only recently come to light in a powerful way during the pandemic. Rising demands from consumers put unexpected pressure on shippers and carriers. Finding 3PL companies that improved capacity opportunities became more of a priority than ever before. Taking advantage of available pending capacity opportunities can help improve overall turnaround times and reduce container shortages.
Prioritize Ocean Freight Based on Speed of Turnaround
Shipping container shortages can impact any transportation mode but they are particularly devastating to ocean freight transports. Bottlenecks and delays at ports as containers have to be located, loaded, unloaded, and reorganized are slowing down the movement of goods in and out of major ports worldwide. Until things improve, a strong focus on fast and reliable ocean freight turnarounds will remain vital for supply chain sustainability.
Diversify Your Supplier and Carrier Base
Disruption to supply chains has set off an array of instances of shipping container shortages, with prices of shipments skyrocketing due to those shortages. Maintaining a diverse pool of carriers to select from generates more opportunities to find available capacity and faster turnaround timelines. Increasing opportunities for capacity and improving carrier and shipper relationships is vital for ocean freight services. A strong and diverse carrier base creates more opportunities to overcome container shortages and other international shipping obstacles.
Leverage Data to Track Drayage Performance and Timeliness of Transit
The problem has less to do with not having enough shipping containers globally and more to do with the containers ending up in the wrong places. An unprecedented buildup of containers in places where they’re not supposed to linger leads to shipping container shortages in other areas because once containers are empty, they are no longer tracked effectively. It becomes challenging to know who needs what and where containers are heading; they end up languishing forgotten at some distant warehouse or hub. However, data analytics can help shippers understand current and projected performance in Drayage. As a result, they can reduce lengthy turn times, avoid extra expenses, and lessen the burden of container backlogs and shortages.
Communicate Clearly, Concisely and Accurately
Shipping container shortages have a tremendous impact on modern supply chain logistics and shipping opportunities. Transparency and clear communication will stay vital for all global trade stakeholders. Container availability is gradually increasing, thanks to improved tracking and monitoring, better communications, and an all-encompassing view of the ocean freight container journey. Instances and severities of delayed shipping due to container accessibility also improved throughout most transportation modes.
Increase Your Lead Time
One critical way to reduce the impact of the shipping container shortage is to increase lead times whenever possible. Building in extra days before and after vital loading and unloading points can help soften the blow a delay can have to the entire supply chain. For instance, let’s say five days are planned for a segment of the journey. If a delay stretches to a sixth day, that’s much easier to manage than if the original plan had allowed for just three days and now was extended to almost a week. Increasing lead times and practicing more accurate ETA predictions can improve turnaround times throughout the network.
Achieve All the Above With Port City Logistics
A combination of stress points and external stressors has intensified shipping demands while spiking transportation and container-related costs to more than four times the standard rate. The ability to ship freight internationally involves many steps and methods and transportation modes. A narrow focus and limited options for carrier selections further weakens the stability of shippers that depend on these transportation lines. Overcoming shipping container shortages requires careful planning and monitoring and a strong partnership between carriers and shippers. Contact Port City Logistics today to learn more.