U.S. shipping port crisis, supply chain bottlenecks continue
The complex global supply chain system is being pushed past its limits. Between the global semiconductor chip shortage, logistics constraints, recent power restrictions in China, and the U.S. shipping port crisis, the world is experiencing significant delays in the time it takes to produce and deliver goods as supply chain disruptions persist.
As people shop more, “manufacturers, retailers and the shipping companies that connect it all [struggle] to keep up while keeping their workers safe,” says Kent German, Senior Managing Editor/Features at CNET. Between the amplified demand, workplace COVID-19 safety protocols and restrictions, and worker shortages, the entire process has been impacted in a way that’s never been seen before.
Critical challenges impacting ocean freight
While “trucks, trains, planes and ships all play a role… it’s the world’s oceans that are the main avenues for most global trade” (German). This is a dilemma because ocean freight now takes almost double the amount of time to travel from Asia to the U.S. compared to last year and costs triple what it did a year ago.
The cause of the shipping container backlog is, “strictly-enforced Covid restrictions at the ports… as well as unprecedented demand for goods from China, South Korea, and other Asian exporting countries,” according to Erik Olsen, Popular Science. He adds, “the current wait time for a ship to gain entry into one of the ports can be over eight days,” leading to record-breaking delays. In addition, “many ships have been ordered to drift along the coast, something that has never happened before” (Olsen).
New restrictions affecting U.S. shipping ports
These restrictions have resulted in many obstacles at the ports. For example, “every shift change for port workers requires new protocols, including the cleaning of crane compartments and equipment, daily health screenings for staff, and other inefficiencies caused by social distancing measures” (Olsen). Additionally, many of the processes for moving freight containers, like crane operations, are manual and unable to scale to meet the increased volume.
Ship size has increased dramatically
Cargo ships today are much larger than they have been in recent years. Kip Louttit, Executive Director at Marine Exchange of Southern California, adds, “15 years ago ships were maybe 13 containers wide, and now they routinely span a width in the high teens or low twenties, resulting in many more containers per ship”. Consequentially, it takes more time and more resources to move cargo.
What’s next for the supply chain
Lean manufacturing and just-in-time inventory are becoming less viable options. These have resulted in longer delays and higher costs at all stages. It’s not a matter of will your purchase experience delays and cost increases – it’s by how long and how much? Plan ahead, anticipate delays, and set the proper expectations with your clients.
Converge is here to help you manage through this disruptive time and we look forward to solving your business challenges. Contact our team today and let’s solve the future.
Read the full stories here:
You shopped like never before. The supply chain couldn’t handle it
Why a record number of container ships are backed up off the coast of California