Relentless port congestion and rising freight costs are heavily impacting global supply chains, with major disruption encountered in sectors such as fast-moving consumer goods, pharmaceutical, and agricultural exports, according to industry leaders who shared their thoughts during a webcast discussing Managing Congestion in a Relentlessly Disruptive Era.
The focus on larger container vessels serving a dwindling number of mega ports has limited the choices of shippers and receivers, and has created a rush to ship through traditional major gateway ports, leading to backlogs and displaced containers.
The group chief commercial officer at Gulftainer, Dave Casey, said: “There needs to be an effort to de-centralise cargo movement or at least reconsider the speed with which industry appears to be centralising the distribution of goods.”
Casey told a panel of industry leaders that whilst larger ports are buckling under the pressure of high levels of congestion, facilities that can handle smaller container ships and general-purpose ships, those such as Hueneme, San Diego, Wilmington, DE, and Canaveral FL, are generally congestion-free.
Major US retailers and mid-sized companies have seized the opportunity to charter conventional vessels and explore an alternative to hub ports in their quest to regain control over distribution channels.
However, one such area proving problematic is refrigeration containers, which are costing shippers billions of dollars.
The global shortage of reefer containers has impacted perishable imports, which due to the seasonal nature of these refrigerated commodities, further exacerbate congestion.
Casey explained: “The condensed nature of certain products such as grapes and clementines leads to more pressure. Many of the ports where fruits and vegetables originate from, such as South Africa, Chile, and Morocco, are much smaller with less sophisticated infrastructure than Asia, North America, and some European ports. In the event there is a delay or port omission, this can further exacerbate the congestion.”
The delay is currently evident in the main ports in Chile, which are congested and are giving priority to container vessels.
“The conventional reefer ships that carry the majority of GTW’s fruit from Chile are being forced to load at alternate and multiple ports, which will cause difficulties for exporters and growers to get their products to market on time.”
With many stakeholders involved in the sea cargo supply chain, it is difficult to ascertain where the responsibility for control sits.
“Traders, shipping lines, drivers, feeder vessels and government departments all have a part to play to help reduce an already struggling system,” Casey said.
“Shippers need to maintain a degree of flexibility over origin sailings, and by tightly controlling and prioritising cargo, efficiently handling customs clearance documentation and payment this will give importers the best opportunity to release and advance cargo through the networks.”
Shipping is an industry that is already embracing digitisation. Neutral providers such as Project 44 continue to develop tech-solutions to provide valuable real-time visibility insights to shippers, carriers and logistics providers.
Advent-E Modal, near dock drop yards and 24-7 operations prove that automation and the drive towards digital technology will continue to improve operational performance.
“Technology needs to be leveraged but more importantly, it needs to enable the correct business processes,” Casey concluded.
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