STATE OF FREIGHT SPECIAL EDITION

DELAYS, ROLLING SCHEDULES, CONTAINER SHORTAGES: WHAT IS GOING ON HERE???

GPI is here to help you understand this shipping season with far too many rolling schedules, port delays, climbing prices and container shortages.   Although receiving one of these messages about your shipment is certainly not what you wanted to hear, you may be left wondering: WHY?

AN EARLY PEAK SEASON

The months of April through July are typically slow to steady when it comes to shipping freight.  This gives ports plenty of time to manage any backups that CNY may have caused before the busy season arrives in August.  In 2020, we began to see this wasn’t going to be the case.  The demand for ocean vessel space started to see a distinct rise beginning in May.  Vessel space was now getting hard to come by and prices started going up.  The reason this happened was most commercial air flights had been grounded by the end of March and a good deal of freight coming out of Asia is transported in the cargo holds of commercial flights.  When the commercial flights stopped, this coveted air space was no longer available so shippers were forced to ship via ocean on freight vessels.  Online shopping also increased as the pandemic continued, and companies answered the demand.  It was clear that peak season was now ramping up a full 4 months ahead of schedule with limited vessel space.  Ports at this time were running at about 80% capacity and there were still restrictions in place limiting the number of people allowed in warehouses and at berthing stations.  Truckers were also on tight restrictions due to pandemic/quarantine guidelines slowing deliveries.

BACKUPS BEGIN

As the official peak season amped up in September, there was already a steady stream of containers and vessels shipping out of Asia.  Ports quickly got overwhelmed and port delays were now common.  It was expected that containers wouldn’t leave the arriving port for at least a week if not more.   This not only affected the delivery dates of incoming goods, but also the empty containers shipping back to Asia.  Once a container is emptied at port or at point of delivery, it’s then shipped back to Asia to be filled again.  But turnaround time for containers was now getting longer than normal because of delays.  The bottleneck was starting in earnest.  By December, west coast ports had vessels waiting in the water for days before even berthing at port.  Containers were removed and put aside to make room for more vessels and containers.  Freight stations and truckers couldn’t keep up with the volume and containers continued to build up.  Many containers that arrived in early December were not even emptied or moved for 4 weeks or more, sitting in the freight stations waiting for their turn to be picked up and delivered.

WHERE ARE THE CONTAINERS

Meanwhile in Asia, empty containers weren’t coming back because of the delays. It’s now pre-CNY and there is a high demand to ship everything before February, but there are very few containers and still very little vessel space. Forwarders battled over containers and vessel space. Ocean lines raised their pricing due to the high demand and started charging “premium” rates which would guarantee a spot and container on certain sailings. As January 2021 began, containers were in very short supply in Asia and getting a spot on sailings was costly and hard to come by.

WHAT NOW?

We continue to deal with the port delays, backups and container shortages.  CNY is now upon us so very little will be shipping out of Asia for the next 3 to 4 weeks.   This should help receiving ports catch up, but is it enough time?  Experts believe that to clear up all the delays, particularly in west coast US ports, it may take up to 6 months.  Some experts are more forgiving and say it may clear in about 3 months.   Either way, it looks like we may be dealing with delays for a little while longer.

If you have any questions about what is happening with your specific delivery, please reach out to GPI’s freight department. In the meantime, please know that GPI’s Freight Department is in constant contact with our factories and logistics providers, diligently tracking your shipment through the process, begging and pleading for space when we find an open slot and keeping you up to date on your shipment’s progress.