Oceanworks Logistics Insights: Q1
More of the same, and then some
As predicted, the global shipping crisis is still far from being resolved. Entering the New Year, we see continued port delays due to severe congestion, container and chassis shortages, ongoing Covid restrictions, and even a few new variables such as data-transfer restrictions in China.
In the US, the ports of Long Beach and Los Angeles are the gateway for a majority of all goods imported into the US, especially from Asia. However, as of early December, almost 100 ships were idling off the coast of Southern California waiting for dock space at the ports, each with nearly half a million containers on them. The average ship wait time has increased to three weeks, with some having to wait nearly a month to dock and be worked so their containers can be offloaded and picked up.
The government and shipping lines have tried to intervene by offering incentives to trucking companies to make timely pick ups from the ports and take advantage of off-peak hours. For example, ocean carrier CMA CGM has started to offer credits for timely pickups. They will give $100 per container made during daytime pickups, from Monday to Friday while night and weekend pickups receive $200 per container. Additionally the Federal Maritime Commission has started to allow the ports of Los Angeles and Long Beach to charge the traffic mitigation fee only between 7 a.m. and 5:59 p.m., Monday through Friday, to encourage the use of off-peak hours. The temporary fee suspension is currently scheduled to last from Dec. 1 to Jan. 31, 2022.
The container and port congestion crisis goes beyond vessel traffic and port operating hours. With supply chain flow backed up several months, chassis availability has also become an issue and there is now a severe shortage. This is troublesome because even when containers become available and truckers are able to secure appointments for pick up from the port, the limited supply of chassis adds yet another layer of complexity to final mile deliveries as there is no way to recover a container without the wheels of a chassis.
Meanwhile in China, ships in Chinese waters have begun to disappear from industry vessel tracking systems. Over the past few weeks, the number of vessels sending signals from China has plunged by nearly 90%, according to data from the global shipping data provider VesselsValue. These signals allow shipping data companies to track vessels in real time and provide information such as position, speed, course and name. Without this data, industry stakeholders lose important visibility which normally allows them to track ship docking, unloading, departure times and vessel movement, seasonal trends and improve port efficiency. China’s government has yet to comment on this loss of data, but it seems this is a result of a new law that took effect on November 1st: China's Personal Information Protection Law.
Tools to stay updated
These incredible and unprecedented supply chain disruptions make it difficult for any business to operate “normally”, as pricing and lead times have increased to unseen levels. At Oceanworks, we are developing better systems and working with our customers to come up with creative solutions to ease the pains caused by the current state of the global supply chain.
In order to help our customers take on long lead times, we have started to offer dynamic pricing and more favorable payment terms that are reflective of shipment or delivery date. This allows customers to place orders without having to outlay full payment several months before materials will actually be delivered to them. Oceanworks will also be releasing a Track & Trace system to all customers in the New Year. Track & Trace is an online portal where customers can go to view all of their orders and track them in real time. Not only does Track & Trace show the latest information on an order’s movement, it also contains all essential order, shipping, and material documentation as it becomes available. Additionally, to help inform and optimize future orders, all Oceanworks orders will be available for a customer to view.
Overall, we view all Oceanworks customers as partners. As always, our promise is to provide transparency and real time updates, allowing you and your team the visibility you deserve so you can manage your supply chain beyond our material delivery. Through the usage of our tools and robust logistics services, we believe we have the solutions for your material needs during these unpredictable times.