While ocean cargo slowed at the beginning of the pandemic, the two largest container ports in the US are now seeing a surge in congestion causing downstream supply chain delays. According to an article in American Shipper, “November container volume at the Port of Los Angeles was up 22% year-over-year.”
Because of the increased volume arriving at the Port of LA and Port of Long Beach, many ships are left to anchor for several days without knowing when they’ll be able to dock.
As this port congestion continues to cause downstream effects throughout the supply chain, many are looking for insight into how delays will impact their shipments so they can remain agile and adjust plans as needed.
Here are some causes of the port congestion as well as a few ways real-time supply chain visibility can help.
Port Congestion Causes and Impacts
The past year has been far from what’s considered “normal,” however, there are a few factors that could be contributing to the increase in ocean cargo.
As ocean cargo from Asia slowed earlier this year, many have been replenishing inventory over the last few months. Additionally, American imports from China have increased as more are staying home and online shopping on top of typical holiday shopping.
And it’s not only American ports that are seeing more congestion than usual. Ports in the UK are already seeing an increase in traffic and are bracing for possible delays due to post-Brexit border checks. While the Brexit deal eased concerns of tariffs on goods between the UK and the EU, the deal does come with more customs checks than supply chains are used to between the two regions.
This congestion is causing various issues for shippers. For example, because ships are dwelling, supply chains are struggling to understand when to dispatch drayage shipments. This whiplash is giving retailers a difficult time finding drayage capacity, and the stagnant containers are resulting in increased demurrage fines at the port.
And even though we’re past the holiday season, many are projecting the traffic will continue to remain high, causing problems in the beginning of this year.
Hapag-Lloyd CEO Rolf Habben Jansen recently shared his thoughts in an article in The Loadstar, explaining “‘I think what you will see in the first quarter is that every ship that is available will sail.’ And he added that we would still see delays due to port congestion and, as such, did not expect to see a lot of blankings but rather ‘more slidings’ as vessels increasingly fell behind schedule. ‘We have to resolve and get control of some of the inland bottlenecks, because if you can’t deliver the boxes then they just get stuck on the ships,’ he said.”
Gaining Real-Time Visibility to Avoid More Delays
While it’s hard to say how long a ship will be left to anchor at the ports right now, greater visibility into the entire transportation lifecycle can help supply chains understand downstream impacts and swiftly react to any delays as needed.
To make more effective decisions, it’s becoming increasingly important to break down the supply chain data silos and gain a comprehensive view of shipments across modes.
“To build a supply chain that can withstand today’s unexpected challenges and prepare our business for the future, we need to derive intelligent insights across our logistics network. This means one unified view into our shipments regardless of where it is or how it’s getting there,” said Gregory Pritchard, Head of Global Logistics and JAPAC Distribution, AbbVie Inc.
By gaining a deeper understanding into delays and exceptions, transportation teams can act as soon as their container is moving at the port to ensure the remainder of its journey goes smoothly. This could mean adjusting appointments down the line or gaining alerts about the shipment’s progress to keep customers updated.
Keeping Customers Updated with the Latest Data
Beyond managing exceptions, customers and supply chain stakeholders will also want to know where their shipment is and when it will arrive.
A survey conducted by project44 last year found that 89% of customers wouldn’t sacrifice visibility or expected arrival times. Customers across industries have come to expect this real-time information about their shipments.
In a recent CSCMP session, Pritchard explained, “We realized we could support the customer experience as well by having our customer services teams use visibility to answer queries from customers.”
Even though some delays and disruptions will be inevitable, stakeholders throughout the process all the way down to the end customer now see visibility as an essential piece of their experience. Real-time insight into freight movement and arrival information allows the supply chain to adapt to disruptions quickly, optimizing operations and reducing overhead costs.
Analyzing Data to Better Prepare for Future Disruptions
This has become the perfect storm at the ports, causing these record-breaking delays. And while an unexpected set of circumstances created this congestion, the long-term effects are still being determined.
While the world is eager to get ahold of the covid-19 vaccine and get back to normal, it’s possible current buying behaviors could last. Regardless of what the future holds, the past year has proven that we should expect the unexpected.
With analytics into visibility data, supply chains can take a more holistic view into their shipments to monitor trends and identify pain points. With this insight, they can improve their strategy to be better prepared for future disruptions.
Port congestion should ease in the coming months, however, there will always be more disruptions impacting the supply chain. Comprehensive real-time visibility has become a foundational element for supply chains to take control of their shipments and increase agility.
To learn more about how project44 can help you mitigate supply chain disruption, reach out to our team.