The Kinks in the Supply ChainApril 26 2021
Our industry is facing numerous problems, delays and issues right now, and the projections for freight in the future looks tough too. These periods of literal and figurative roadblocks in the supply chain remind us how connected the transportation industry is. We’re facing a multitude of challenges, including:
An Empty Container Rush into LA
This article from Freight Waves explains, “For the first time in the rail container volume index history, nonholiday empty containers outnumber the loaded container volumes heading into Los Angeles. This occurred briefly at the beginning of 2019 around New Year’s when the trade war with China was escalating. Empty international containers are controlled mainly by the maritime operators and can signal growth in import volumes. This one, however, may just illustrate how dire the situation really is.”
FreightWaves’ Maritime Market Expert, Henry Byers says this about the surge of empty containers and what it means for the industry moving forward:
“It’s time to sound the alarms. The shortage of container capacity is already affecting many supply chains, but almost no company will be spared from what lies ahead. The congestion and delays happening right now are primarily part of the downstream ripple effect that was largely caused by last year’s increased import volumes. Since we are able to see these volumes as they are leaving on vessels that are destined for the U.S., we can tell you that these TEU volumes are still hitting record highs. So, if the downstream supply chain is already under enormous pressure, we are likely to see rates reach new heights as well.”
The Employee Port Strike in Canada
Today started a partial strike of port employees in Montreal, Canada – in the midst of the world struggling to keep moving forward throughout the pandemic. According to FreightWaves’ Nate Tabak, this “came in response to a move by their employers to stop providing a guaranteed base pay regardless of hours worked.” Workers first went on strike last year but ended in a truce. Last year’s strike “also led to months of container backlogs. But there is one big difference between then and now: Port congestion is a lot worse. Simply put, it won’t be pretty. And it likely would lead to delays and shortages of consumer goods across Eastern Canada.”
Cargo Congestion in Chicago
Again according to this FreightWaves article, “Cargo congestion has gone from bad to worse at Chicago O’Hare International Airport, forcing importers to wait several days to retrieve shipments and prompting two large logistics companies to migrate airfreight operations an hour west to an uncrowded facility in Rockford, Illinois.
There is so much cargo piling up at O’Hare that airline-handling agents for the first time in memory are actually renting warehouses in surrounding townships to hold the overflow until it can be sorted for customer pickup, local trucking and logistics professionals say.”
The article continues that this is nothing new with O’Hare – the airport is outdated and technology changes, added trucking access and pick-up scheduling should be applied to help, but hasn’t been implemented. These issues are caused by fewer employees and difficulty to hire help, which has created a major back-up and lots of waiting in lines. “Sometimes the carrier has to bring in substitute drivers to replace those who use up their on-duty hours, which are capped by highway safety regulations.”
These are just three of the problems our industry is facing as a result of the pandemic’s impact to our society. There are moments where things feel very bleak looking at how much the market has changed and how long it may take for the supply chain to go back to normal. As logistics providers, we aim to always do right by our customers and deliver the timely transportation of their freight despite roadblocks. However, when faced with so many out of our control industry disruptors, we have to focus on the freight market data, rely on our trusted carriers and communicate thoroughly and often with our customers.
We know the industry has been difficult, but in our 35 years in business, we can tell you we’ve faced challenges before and come out on the other end better for weathering the storm. We will always stay moving and shipping our customers’ freight with hard work, exemplary service and the highest levels of integrity. We thank you for your trust and support as we navigate COVID’s disruption!
All the Best,