As shipping alliances increase –which to date are no more than five- the low demand/empty container problem has been solved for the most part, but a new enemy rises for carriers: logistics congestion.
Just last week, Seattle’s largest container terminal lived a complex episode of truck congestion, with truck turn times ranging from one hour to as much as a full day, delaying shipments and deliveries, because of a surge of new business gained from the restructuring of the global vessel-sharing alliances in April: 2M, Ocean Alliance and THE Alliance. The situation was worse considering cargo owners were charged up to US$70/hour of waiting time for vessels that took up to a month to arrive at their destinations.
Few operators, large volumes
Yes, alliances have managed to optimize container shipping, filling boxes and spaces and making the operation profitable again. However, maybe the gradual reduction of cargo volumes made port operators grow unaccustomed to a high demand, which came almost literally overnight.
Cargo load/unload truck congestion at ports is a small problem compared to what vessel delays could mean to the industry. It is one thing for one truck with one or two containers on board to arrive a couple of days late, but for if a containership with thousands of TEUs it’s a potential commercial catastrophe… and even worse if it’s a time-sensitive cargo.
Since large vessel-sharing alliances are not going back to their individual configurations, ports and terminal operators have no other choice than to find ways to serve large cargo volumes and the new transit schedule. One way to adapt to this new scenario is to prepare beforehand with pre-notifications of arrivals to enable customers to be prepared for cargo delivery when their shipments are ready, and other forms of supply chain coordination.
For an industry that’s been struggling against low cargo, weak freight rates and vessel oversupply, it’s almost a bad cosmic joke that just as things appear to start to look better there should be another obstacle to defeat.
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