The Slow Boat to China  

June 22nd, 2021

For individuals waiting for a delivery that is stuck in transit, it is a minor irritation!


Today’s post is written by Ivy Ray, Senior Procurement Specialist at SafeSourcing Inc.

For individuals waiting for a delivery that is stuck in transit, it is a minor irritation.  If you are a manufacturer producing supplies for your customer, it is a nightmare! Higher shipping costs have tremendously impacted the supply chain.  In addition to the increased cost, there are longer wait times, due to the slower circulation of containers. This slowdown, driven by the pandemic, is crippling to the supply chain, and has reduced overall capacity.  All of which is driving up rates and creating massive delays that are expected to continue for weeks to come.

China has been requesting the return of their containers after unloading, so instead of the usual filling of the returned container with goods, they are going back empty. Other factors, including reduced labor productivity at warehouses and at marine terminals, are also contributing to this issue.

In “normal times”, the alternative of air freight would be an option to relieve the strain, but these are not normal times.  Freight rates from China to the U.S. have surged 300% and international flight volumes have plunged due to recent travel restrictions. Air freight companies typically use the extra capacity on the belly of a passenger plane to transport cargo. Hopefully, the recent increase in passenger travel will soon bring this option back into play.

While there are always factors that have negative impact on the supply chain, these instances usually occur and are most times expected.  The recent traffic jam on the Suez Canal did not help matters at all. Global trade has been disrupted and is affecting multiple industries simultaneously which is unprecedented. Economies around the globe are absorbing the ripple effects of the disruption and there is an expectation that this will last, though the end of this year.  We are back to quoting the frequently used phrase for 2020, “we’re all in this together”, and we will have to hold on and wait for our ship to come in!

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