Ocean Congestion & Constraints

As many of you are all too aware, the US importing and exporting communities face constraints and delays at a scope and scale never before seen due to a combination of many factors from huge surges in import volumes and the same time capacity has been limited in many of the physical cargo handling jobs.  The combinations of constrained capacity at every stage of the supply chain from origin to destination has resulted in significant negative impacts to global trading supply chains, impacts which are expected to continue for the foreseeable future.  

What might have been singular capacity bottlenecks in a few locations in the past have now turned into capacity constraints at every of the cargo’s journey.  These capacity bottlenecks have stressed operations, sales and logistics managers alike to a degree none of us have experienced before and making matters worse for all, there is no real end to the conditions that are causing the constraints for quite some time.

As many of you know, it is extremely difficult to even get cargo booked at origin, regardless of where that origin is. Once the cargo is booked and then eventually delivered to a rail ramp or an ocean port, there are often significant delays getting the cargo onto a vessel as well. In some Asian ports those delays alone have exceeded 3-4 weeks.  Once the cargo has sailed, even the transit times to/from the USA are now longer than normal, even at the current astronomically higher freight rates (which are also not projected to decline over the next few months as we head into peak ocean shipping season).  Compounding the situation for inland import cargo, some of the largest steamship lines have recently severely restricted or canceled services for inland movement of containers.  Once containers do arrive at inland locations, finding trucking capacity and now simply finding chassis to have the containers moved upon is a time-consuming process.  In the Midwest cities of Kansas City, Omaha, Chicago and St. Louis, it is not uncommon for containers to set at the rail ramp incurring rail storage waiting for chassis to become available.    The combination of all of these factors have made all-in transit times following import cargo’s delivery to a foreign port often reach 2-3x what would have been normal transit times just a few months ago.     

As an international logistics company and customs broker, we are working extremely hard with our overseas partners to secure space and get cargo moving onto vessels while also trying to provide the most up to date information to our clients throughout the process. Once the cargo is in the USA, we then work with many different truckers to help mitigate the delays and extra charges. Unfortunately, this is a situation that the entire market is facing and try as hard as we might, we are unable to avoid it completely.  

We want to let all of our clients know that they should plan for longer dwell times at every stage of the logistics process, but particularly at the rail and understand that the possibility of additional charges as a result of the chassis shortage is quite high at this time.  We also encourage all of our clients to read the attached synopsis of the congestion situation just published by Hapag Lloyd (at top 5 global steamship line) which shows even a global steamship line that might have some clout with a port or a railroad has the same logistics bottlenecks negatively impacting them.    https://www.hapag-lloyd.com/en/news-insights/news/2021/04/north-america—operational-updates.html.  
We would encourage everyone to share this information with all of your supply chain stakeholders so all can better understand the current environment. The current market situation is not projected to improve in any significant way over the next few months, so it is more important than ever that all supply chain stakeholders have an understanding of the impacts of all of this on their business.  

Please feel free to reach out to your customer service representative or salesperson if you have any questions.