As things change, the more they stay the same.
COVID outbreaks in China are continuing to have dramatic impacts on global supply chains, but possibly a greater impact on smaller trade lanes such as Oceania. There’s a lot of images on social media showing the congestion at Chinese ports. But, many of these images are showing every maritime piece of hardware – including container ships, but also bulk carriers, fishing boats, tugs and even navigational markers. The chart we’ve included below is only showing container vessels.
Needless to say, the congestion is significant, and this is going to impact us for some time.
We are seeing delays in getting containers received at ports, and often the ports will only accept containers that have a ship with a guaranteed berth spot in the next seven days.
We are also starting to see equipment shortage (CMA and ANL are of particular concern).
Capacity is also down at the moment but expected to normalise over the coming weeks.
Shipping rates are stable although once factories reopen, we expect pent-up demand for product will lead to limited space and rate increases.
This is also a time of year where weather can start to have an impact across Asia.
We are seeing weather related issues impacting;
- India – extreme heat leading to some factories closing
- Hurricane season is not far away and may be early
- Fog becomes an issue in Northern Chinese ports
We are also seeing delays in Australian ports of up to 10 days, and this will not improve whilst we have the weather patterns we are currently experiencing. We have also seen delays at various times in finding a container yard that will accept empty returns.
So what does all this mean?
The keys to a resilient supply chain are;
- Prioritise POs. You may not get all of them out.
- Micro manage vendors. Make sure your order is being worked on.
- Market intelligence. Be on top of what is happening in relevant load ports re covid, equipment, blank sailing and rates.
- Visibility of freight movements. Know where your container is and what is the impact on inventory holdings and customer demands
The situation is not likely to change anytime soon.
These areas of concern need to be addressed so that internal stakeholders and customers have the right information to make decisions. At Ligentia, we help customers achieve resilience. If you have a need in any of these areas, please reach out to Dean Neville (email@example.com) or Peter Melville (firstname.lastname@example.org). We are here to provide solutions.