Ongoing delays on the West Coast of the United States
As vaccination rates are rising and restrictions are being lifted, the temptation to think that the aftermath of the pandemic is behind us is high. Yet, in spite of this good news, the global supply chain is only now starting to feel the real impact of the pandemic.
Delays are likely to last until beginning of 2022
In an article in May, we shared news about the delays that container ships were facing in the US ports and their impact on the US economy. On September 18th, 73 cargo ships were waiting outside the ports of Los Angeles and Long Beach. As two of America’s largest ports they handle 40% of all cargo containers entering the country. The average number of container ships at anchor is usually between zero and one.
As the US economy has reopened, the demand for imports is surging. While retailers and manufacturers are placing orders to restock their inventories, shipping delays are worsening. For instance, the average door-to-door time for ocean freight between the US and China is now 30 days longer than in previous years. The shipping system cannot keep up with the demand.
The California ports of Los Angeles and Long Beach are extending working hours to increase access time for trucks to shorten waiting time at anchor. Cargo ships have also been diverted to the nearest ports to prevent thousands of containers from being unloaded. Despite those efforts, disruption in the global container shipping industry shows no sign of being resolved any time soon as container shortages and the risk of strikes and Covid shutdowns continue to be huge problems.
The disruption will certainly last through the beginning of next year and cause massive delays to imports from Asia ahead of the busy holiday period in November and December - leading to shortages in the run-up to Christmas.
Anticipate delays to limit costs
The situation will even impact companies that don't feel the immediate impact of the ongoing disruption. A lack of visibility could mean that the ripple effect will leave many in limbo, not knowing where their goods are and when they will arrive. Those unexpected delays can have a tremendous impact on operations and costs and even jeopardize the future of small and mid-market companies.
These impacts might be unavoidable, but real-time visibility can help companies to better anticipate these events, assess their impact, and, most importantly, mitigate their outcomes.
Wakeo’s real-time visibility solution empowers companies by providing the exact localization throughout every stage of the goods transportation process and the accurate real-time ETAs. This information is crucial to put plans in place to deal with delays.
Anticipating delivery time enables users to plan logistic operations accordingly and limit operational costs. In case of longer delays, the faster you can anticipate the need for transportation alternatives like air freight the lower the unexpected costs will be. Securing a late booking for a standard large container (a 40-foot-equivalent unit, or feu) on the line from China to the west coast of America can cost up to $20,000.
Our advanced analytics and route analysis help our clients to identify trends and avoid routes that are facing increasing delays and disruption. Identifying the most reliable and quickest route is a huge competitive advantage when the market is facing shortage and extended disruption.
The previous crises in the global supply chain have shown that the companies that grew the most were the ones that invested in innovation - reducing costs to survive while simultaneously investing in their future growth. The COVID-19 pandemic amplified the need for agility and resilience and emphasized the lack of visibility in our global supply chain. We are at a turning point where real-time visibility is no longer just a luxury, but now a requirement for success.