No Room At The Inn

The stressed global supply chain situation prompts an update to help shippers plan.

Asian exports continue to surge to the US and EU with significant increases to ocean freight rates as well as operational complications.

Drewry Shipping Consultants reports average rates to be 2.8% higher this week over the prior week.

Overall rates are 93% higher than one year ago. Space constraints from Asia are driving rates higher and container availability has become a serious issue.

There are not enough containers to cover the bookings. Ocean carriers cannot return equipment to Asia fast enough to keep up with demand. US exporters are unable to cover bookings because the shipping lines are sending empty containers directly back to Asia rather than accept low-revenue shipments.

Furthermore, the surge to the US has brought the worst port congestion since labor strikes shut down the ports. Vessels are waiting at anchor for berths, terminals are congested, chassis are in short supply, containers are incurring import detention/demurrage, warehouses are full, and the rail system is also operating at capacity.

While this has created serious challenges for importers, the export community is also feeling the effects.

There are container and chassis issues in various locations, export space on some routes is limited, certain transshipment hubs are congested, and truck capacity is an issue.

Special Logistics Group is working closely with our preferred carriers and providers to navigate these challenges. We have developed some alternative logistic plans to overcome the problems and are able to cover the bookings at the desired times with rare exceptions.

Our advice is to plan and book as far ahead as possible, and to consider alternate routings when needed. We have also seen that sometimes a planned small additional cost at the front end of the shipment may avoid future complications, delays, and costs.

As always, we remain available to discuss your logistics needs, feel free to contact us.