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ICAT Blog: Article Ocean Shipping Woes: Capacity, Cost & Congestion

February 9, 2021

Moving freight via ocean has become more-than-tedious with the current strain on the global container shipping industry.

The pandemic that hit in early 2020 may have temporarily decreased the overall demand for ocean cargo service, yet spot container rates have been increasing, especially in recent weeks. Many companies have faced deteriorating service and higher ocean shipping costs, causing an uproar with the major steamship lines, who, last year, reduced available shipping capacity by more than 13% to meet the decline in global demand.

Although the burden of higher costs has greatly impacted the U.S., the issues go far beyond that. West Coast ports are extremely overwhelmed and container shortages along key transpacific routes are causing massive delays and lost business for exporters. Just last week, more than 30 container ships were anchored outside the neighboring Los Angeles and Long Beach ports.  Due to the strained ocean freight sector, many companies are being forced to rethink their shipping mode and strategies altogether.

With record volumes in ocean shipping, the recent volatility is likely to continue through Spring 2021. And although some forwarders in the industry hope the nearly two-week Chinese New Year holiday—starting February 12—will give steamship lines and ports the relief they need to catch up, many still have their reservations.

On the importing side of the industry, businesses can take a few steps and precautions to navigate the uncertain market, including:

  • Communicating with your freight forwarding partner on a regular basis to stay in the loop on any significant changes and updates that could potentially affect the shipping modes you utilize.
  • Comparing various modes of transportation and cost options to identify if you are receiving the best cost and most efficient service as possible.
  • Allotting for additional freight costs and transit times in case there are any unforeseen delays or limited capacity issues that you didn’t plan to encounter.
  • Booking shipments in advance if you know you need to get something to its destination by a specific date. Changes can happen at any moment, especially during a pandemic.

Before you book your freight via ocean, let’s talk. We’ll dig deeper into your logistics needs and challenges and create a customized plan to fit exactly what you need.

Resources:

Nicole Reed, Marketing Supervisor

Nicole Reed

Marketing Supervisor