As 2021 enters its final months, the logistics industry is continuing to grapple with the disruption and port congestion that began almost a year and a half ago – as the Covid pandemic struck and the global supply chain that runs like a finely tuned watch was thrown out of sync. So, let’s take a look at the latest updates from the Asia-Pacific:
Container shipping demand is especially strong in the US & Europe as the holiday season approaches
As we have noted in previous updates we expect the strong demand we’re currently experiencing in logistics to continue for the rest of the year. In particular, we expect strong demand into the US & Europe – especially out of Asia Pacific.
Part of this rising demand is due to the approaching holiday season – with Christmas in many destination countries, as well as commercial holidays like Black Friday and Cyber Monday. But it is not limited to the US and Europe – for the Asia-Pacific, Golden Week in October will add to the seasonal volume rush.
We also expect to see some early signs of a pre-Chinese New Year rush in December – with Chinese New Year taking place on February 1st next year. If you’re concerned about the oncoming peak season – our article on three things you can do to keep your logistics moving this peak season could be helpful. Søren Fosgerau Ostergaard, Head of Twill Commercial, explains the further outlook and what you can do now when planning and booking your shipments:
“As it looks today, the strong demand being seen globally in logistics is likely to continue. In order to minimise possible disruption to your supply chain, we strongly recommend you start to plan your shipments as early as you can, give yourselves enough lead time and take any potential delays into consideration while planning your supply chain and cargo bookings.”
Port congestion causing imbalanced equipment supply
Looking at container availability, a shortage of empty containers continues to be an issue across Asia and around the globe – and the situation is not likely to improve in the immediate future.
The shortages are being caused by a ripple effect of factors – starting with rising demand around the world, together with operational challenges in turning empty containers around to make them available again. This turnaround delay itself has been caused by disruptions in ports and hubs overseas due to everything from Covid restrictions to a shortage of drivers.
Severe port congestion has resulted in an imbalanced supply of equipment across Asia. For dry containers, both 20ft and 40ft are in short supply in China, Vietnam, Cambodia and Indonesia – but supply is more manageable for the rest of Asia-Pacific.
Schedule reliability feeling the impacts of COVID-19
Much like containers, schedule reliability is being impacted by many different factors. The recent surge in demand, coupled with reduced operational capacity at ports due to Covid restrictions has created greater congestion. As an example, in the US, we are seeing a record-breaking number of vessels – 44 at the start of September – being delayed outside ports for 8 days or more.
Our colleagues at Maersk are taking steps to try and mitigate delays and improve schedule reliability wherever possible, including:
For the Oceania network, three vessels have been added to the fleet.
For the Latin America network, Maersk is working to streamline service coverage to reduce the number of port calls and offer more flexibility to help catch up on schedules – while working with ports and terminals to find new ways to minimise delays.
For Transpacific trade, in August a new service was launched to cover Yantian and Ningbo in China and Los Angeles in the US. Alongside this, a new East Coast service was launched to cover Vung Tau in Vietnam, Ningbo and Shanghai in China and Norfolk and Baltimore in the US.
What can you do to stay on top of your logistics?
We know this is still far from ideal, but we’ll keep working to improve reliability even further for your cargo. Alongside us, there are some steps you can take to help improve the situation for your business:
Plan in advance and give yourself time – The best bit of advice we have is to organise your cargo bookings and plan them as far in advance as possible. Forecasting your shipments will give you the best chance to avoid delays – and will help you avoid the costs and congestion of booking last minute.
Explore alternative transport options – Being open and flexible around alternative transport solutions, or combined transport solutions, will help you keep your cargo moving. At Twill we have transport options available across sea, rail, road and barge, for example via our inland transportation services.
Talk to your suppliers – At a time when the logistics landscape is changing very quickly, having clarity and strong communication with your suppliers is invaluable. Make sure everyone knows and understands their responsibilities as per the contract you have agreed and it will help you avoid delays before they occur and navigate them quickly when they do.
For more insights and updates like this, take a look at our Knowledge Hub!