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A shortage of equipment, especially in 40’ containers, is causing chaos in supply chains around the world, continuing to drive up ocean freight rates already at record levels. This situation is hitting the China, Vietnam and Indian subcontinent trade lanes particularly hard, furthered by the increase in traffic flow out of Asia to North America and Europe.
There are no signs of this being resolved any time soon which poses a big challenge for ocean carriers, freight forwarders and shippers alike. The combination of this year’s e-commerce boom, a sustained peak season and Golden Week will keep demand high and capacity scarce all the way through the first quarter of 2021.
The immense volume increases over the past five months, in the midst of the pandemic, as well as continued strong demand has vessels to the US west coast fully booked. This has resulted in ocean carriers reinstating “blanked sailings” and “container rollovers” at leading Asian ports and ensures they will continue to roll out additional General Rate Increases (GRIs).
Compounding problems in the U.S. is a serious shortage of trucks, chassis and drivers at the major port facilities of Los Angeles, Long Beach and New York/New Jersey which is causing significant delays. As a result, many drayage carriers have implemented a congestion surcharge.
LCL shipments have also been impacted, as many end up waiting a few weeks from arrival at the port until delivery to the unloading warehouse due to longer than normal container de-vanning times and local deliveries.
While shipments from Asia to Canadian west coast ports are experiencing some of the same issues at origin as US bound freight, it is not to the same degree. In addition, Canadian west coast ports are in a much better position and not experiencing delays caused by the extensive congestion and chassis shortages US ports are facing.
Supply chain disruptions will continue into the first quarter of 2021. The best option is for importers to allow additional time for shipping orders and book shipments as far in advance as possible to minimize potential delays and allow the best chance of securing space on the first available vessel departure.
For more information, contact Chris Barnard, Vice President – Projects & Market Development.
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