The combination of global events over the past year has led to a worldwide container shortage. It has increased costs and doubled the number of routes as never before. Not only were companies suffering from historically high freight rates, but there was also more significant uncertainty as to when cargo would be delivered. Procrastination has become a very familiar term.
Industries such as housewares, fitness equipment, and outdoor recreation have seen significant growth due to Covid-19 and quarantine regulations. The increasing demand for products in all these categories has led to an unprecedented container shortage.
Other global events, like the blockage of the Suez Canal in late March, have also led to container shortages and higher freight rates. In addition, Covid-19 affected the global merchant fleet’s crew requirements.
Today, supply chain leaders are forced to make strategic decisions in the face of unpredictable shipping schedules and rates.
Top concerns for shipping from Asia to major U.S. ports
Supply chain leaders are most concerned about how the container shortage will continue to impact the cost and timelines of shipping from Asia to major U.S. ports. Also, supplier audits are also in great demand these days.
U.S. ports with the highest volume of shipments from Asia include:
- Los Angeles
- Long Beach
- New York
U.S. imports from Asia rose 22% from February to 1.66 million TEUs, an impressive 90.5% year-over-year increase and March was the second busiest month in trade history, according to the Port, Import and Export Reporting Service (PIERS).
Ports in Asia and Europe are experiencing congestion and delays, and container shortages in Asia are expected to worsen in the coming weeks. At major U.S. container ports, an unprecedented increase in imports is likely to continue at least through the end of this summer as retailers respond to increased consumer demand.
Rising costs and increased shipping delays
Container shortages continue to drive freight rates higher, and some experts expect them to remain at these levels for the foreseeable future. Many companies are taking action to lock in annual shipping contracts at current rates.
Shipping companies are requesting and recommending bookings at least three weeks in advance. Delays in shipping, rail, and trucking are expected to continue through the summer of 2021 as ships wait more than three days in major Asian ports, and the number of workers is limited. Quality control services can help in such situations.
Which sectors are most affected?
While all imports are certainly affected by the container shortage, the following sectors have been severely impacted.
- Semiconductors and computer chips
- Gasoline, Gasoline, Gasoline, Gasoline, Gasoline
For example, seasonal industries such as swimming pool supplies may miss the peak of sales this summer because of this delay. Some experts predict the shortage will continue into next year. Still, the Biden administration has announced plans to restructure the U.S. supply chain to ensure there are no shortages of crucial equipment and products.
Anticipate orders and communicate with suppliers
The ability to anticipate orders and communicate clearly with all your suppliers is becoming increasingly important for companies in order to maintain healthy inventory levels. Especially now that freight forwarders require bookings, forecasting also allows companies and factories to know when to place orders to account for delays. In addition, this type of forecasting is healthy for manufacturing and supplier relationships, helping partners see the value of their business going forward. Online tools like Smartsheets make it easier to communicate with international manufacturing partners in real-time. It’s essential to create a “dashboard” that includes purchase orders, estimated shipping dates, estimated completion dates, etc., and to highlight any potential issues in red so that both the company and the supplier can see them.