Suez Canal Disruptions Felt Throughout The Industry
The Ever Given is dislodged and the Canal Authority is working to clear the backlog of ships on either side, but the fallout from the previous week has only just begun reverberating through the logistics industry. What looks to many like a problem on another lane, in another country, for another carrier is actually a significant disrupter to the transportation industry worldwide, affecting shippers everywhere
Imagine you’ve made dinner reservations at the hottest new restaurant in town. You have an eight o’clock reservation and arrive fifteen minutes early to have a nice drink at the bar and do some people watching while your party arrives. Instead of walking into an efficient seating process, everyone with a reservation from six until ten has shown up at eight, waiting for service. It’s going to be a mess, and that mess is plainly visible just over the horizon for shippers. People will be shouting, dates will be hangry, servers will be frantic, and everyone will wonder how it went wrong.
TOC is here to explain how the next few weeks, like that night at the restaurant, will play out.
In the ocean cargo market, the hiccup in the Suez will radiate outward as vessels struggle to reach ports in a timely manner, because the line of waiting ships is out the door and around the corner. Some carriers and vessels gave up and opted for the 3,800 mile, 12-day transit around the Horn of Africa. If those ships had a port call scheduled for today, they won’t call for another 13 days, leading to massive delays, likely demurrage and detention for containers at the port waiting for these vessels, and a lack of empty containers being unloaded and turned with new cargo.
Just because the Ever Given wasn’t calling your local port doesn’t mean there aren’t a number of vessels in that line who are supposed to be showing up soon and won’t be. Because shipping is a finely tuned dance on a carefully crafted schedule, these issues compound as they cascade down the line of imports and exports, equipment, and port operations.
Unfortunately, it’s not just the ocean cargo that’s at risk for disruption in the domino fall coming. Already-reduced air freight belly space has been filled with PPE, vaccines, the already-present load of consumer goods, and a crush of unanticipated JIT cargo that has been mode shifted because of port and rail congestion.
Air cargo will surge as people divert from ocean shipping to ensure they’re on schedule. With lean inventory still reeling from a difficult 2021, more parts will need to be shipped by air to meet the inventory needs of manufacturers whose assembly processes run with little on-hand inventory. The fire at the chip factory in Japan, as well as overall semiconductor shortages, are starting to weigh on truck and automobile manufacturers.
At TOC, we reiterate that communication cannot solve every problem or move every shipment, but working together, we can prioritize the most urgent of cargo, identify cargo in transit that has increased in importance and attempt to transload or divert when it reaches the United States and pre-book expedited trucking or domestic air freight to make up time upon arrival. Our account managers prioritize our professional and personal relationships with our customers. Make sure to remain in close contact with your TOC AM in the upcoming weeks for updates on the impacts of the Ever Given‘s Suez closure.
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