An in-depth look at the changes to Shipping and Freight during a pandemic
In today’s strange social and business climate one element, in particular, has become an issue for all of us – shipping and freight.
The drama on the Suez Canal, where one of the world’s largest container ships was stuck for a week and held up $billions of trade before being freed, is just the latest issue in the ongoing container crisis which began to be pressured since the start of the Covid-19 pandemic.
In this blog we take a look at five common questions and break them down for you to understand how and why supply chains are in a pressured situation. In discussions with our logistics services we have the latest intel on issues that are affecting all deliveries transportation that touches all shipments by air, land, and sea. Something you are possibly experiencing in your own supply chains during this pandemic. Even with UPS, FedEx and DHL.
So why is there a global issue with shipping?
This started back in March/April 2020 during the Covid-19 led factory shut down in China. This meant that production ceased, causing ships to be furloughed in offline locations. As PRC returned to production, the ships needed to be brought back online. Allied to that the unprecedented demand for PPE and the prioritization of huge global conglomerates exceeded shipping container capacity when the factories and ports came back online.
What is happening right now?
Due to the continuing effect of Covid-19 on the workforce there simply isn’t the resource to unload/reload, railcars, over-the-road drivers, or ocean containers to handle the rise in the volume of shipping. We are informed that ships are even by-passing Europe in order to return to the Far East more quickly. The freight forwarders have also conveyed to us that truck drivers are waiting a whole day to be unloaded before returning to their loading yard and quitting their jobs.
What are the alternatives?
Due to these problems with ocean shipping some businesses have gone to the expense of air freight but even then, there have not been enough cargo planes to meet demand. Some airlines are converting passenger planes to cargo carriers. As you would expect, the spike in demand is causing huge volatility in pricing.
What can we expect to happen next?
In terms of the outlook, we are told to expect that these challenges to continue, especially with empty containers not getting back quickly enough due to the reasons outlined above. With this in mind, we strongly urge you to consider ordering in ample time to factor in longer shipping lead times.
What can you do to help your business?
Additionally, where possible, you can assist your networks by supplying quarterly forecast breakdowns which will help to manage these processes for you as quickly as possible.
At this time, guaranteeing delivery dates in this moment isn’t something businesses can offer with any certainty given the limitations of the supply chain capabilities worldwide.
As always, the TyTek team will keep you advised and appraised of your order with us. If you have any questions, please don’t hesitate to contact us.