Capacity is strained, availability is low, and the cost to book a single container is reaching into the low five figures. It’s fair to say that no one in the industry is happy with the state of container shipping at origin.
To borrow from the Talking Heads, you may want to ask yourself, well, how did we get here?
The impact downstream is just as bad. Citing Sea-Intelligence data, the Wall Street Journal reports that a mere 40% of vessels arrived on time in March across global ports. These delays only add insult to injury as consumer demand remains high while the supply of raw materials and components for finished goods stays scarce.
It’s bad for shippers and beneficial cargo owners, it’s difficult for the LSPs that serve them, and it leaves consumers unfulfilled. But what about carriers?
FreightWaves reports the National Industrial Transportation League (NITL), the oldest industry shipping group, has asked U.S. regulators to shift some of that burden back on carriers. In its proposed amendment to the Shipping Act of 1984, the NITL has asked Congress to require carriers to adhere to minimum service standards, refrain from excessive detention and demurrage practices, and improve the practices surrounding the allocation of equipment and vessel space.
The World Shipping Council, which represents most of the planet’s carriers, spoke out against the NITL proposal as micro management.
Whether the United States takes up the NITL proposal, regulations can only go so far. But there are other ways to level the playing field. We hear that some of the world’s biggest LSPs and shippers have deployed a new type of solution that can better manage all of the data surrounding their ocean allocations, carrier and NVO relationships to better measure performance and act on unexpected carrier changes at origin.
Capacity constraints and limited supply aren’t a problem that’s limited to the sea — the pattern repeats itself as soon as the cargo hits the shore.
The demand and supply of wood has sent the price of pallets skyrocketing by as much as 400%, according to a recent report in Supply Chain Dive. Several reasons are to blame for the shortage. Consumers have shifted their spending from services and experiences to products; retailers, groceries and consumer goods manufacturers are stockpiling inventory; strained trucking capacity has sent dwell times soaring.
While industry insiders acknowledge mills are working hard to produce enough new pallets to keep up with demand, prices for lumber have also risen dramatically as more homebound consumers have taken on home improvement projects or are looking to build new homes.
What even is normal at this point? In a year where everything was turned upside down by a global pandemic, it’s hard to imagine things will be exactly like they were as more countries and businesses begin to open up. And even before that, big shifts in consumer behavior and inexpensive access to technology meant no business was safe from disruption. Supply chains have been increasingly vulnerable as a result.
One could argue that COVID-19 represents the end of business as usual, that we have entered a new, never-normal age.
To help prepare for a time where the only guarantee is constant change, DHL chief operating officer Val Hoge penned a short guide to improving supply chain resilience. The article offers five recommendations, spanning everything from scenario planning and technology, to finding ways to balance labor with efficiency and resiliency.
If the past 18 months have taught us anything, it’s that now is the time to consider ways to maximize the potential of not only your systems, but especially your processes and people.
It’s been about two months since the Ever Given ran aground in the Suez Canal, and yet the world is still feeling some of the ripple effects of the six-day blockage.
Believe it or not, the Ever Given still sits idle in Egypt with containers aboard, as the Suez Canal Authority (SCA) continues to negotiate with the ship’s operators over the cost of damages and services rendered.
Although there’s no clear timetable of when the ship will truly be free, the incident has spurred the SCA to move ahead on new projects in the canal. Supply Chain Digital reports that Egyptian president Abdel Fattah al-Sisi has given the order to immediately put a new two-year development plan into action that will see work done to widen and deepen the canal.
Those of us who have been involved in supply chain long enough know how hard it can be to get your non-supply chain friends and family excited about logistics. But good news — times have changed.
Thanks to a pandemic and ensuing shortage of everyday items, many more people have become aware of (and dare we say interested) in how supply chains tick.
But that doesn’t necessarily make it easier to explain how global networks work. So whether you’re a citizen, a CIO or a technologist still wondering what the buzz is all about, The Enterprisers Project has come up with a handy little explainer that boils supply chain management down to more simple definitions and terms.
It’s worth remembering that there are some very basic principles behind all the complexity we’ve created as corporations and suppliers expanded across the globe. And in case you want to help others understand it, or even remind yourself why it all matters, this is an enjoyable and informative read.
Thanks for stopping by, folks! Happy Friday! Don’t forget to check out last week’s news and come back next week for the following Friday Five logistics news roundup!