Updated: Aug 29, 2022
Erik Rosica, Account Executive at OEC Group’s New York office, discusses the current state of logistics in the electronics sector and offers advice on how to navigate the current landscape in order to be well-positioned for the upcoming holiday season.
What are the current conditions like on trade lanes that are most commonly used by shippers in the industry?
Focusing on trans-Pacific lanes from South Asia to the United States, domestic gateway ports are still battling congestion and equipment shortages. The backlog in Los Angeles is not as eye-popping as it once was, but slow steaming vessels from Asia are pushing port operations to the limit. On the East Coast, backlogs persist in Savannah, and delays at New York-New Jersey are still significant. That being said, conditions may be opening up for savvy shippers to secure space on those lanes. If planned properly, shippers may be able to capitalize on that new capacity.
What is the inland distribution landscape like?
Transporting goods to Middle America is a challenge due to the poor state of IPI connections on the West Coast and severely congested inland transportation hubs. I’d say Middle America is the only region that will be difficult to reach and meet holiday demand. That being said, there are alternatives to IPI transportation, and the right logistical provider can help navigate that situation and minimize delays.
Can shippers in the electronics industry expect any obstacles as we approach the holiday season?
There are two major market situations that shippers in this industry need to keep track of. One is the ILWU and the PMA labor dispute, and the other is the potential strike among West Coast rail workers. Rail workers likely would have gone on strike already if an Executive Order hadn’t been issued to temporarily block any labor disruptions. That order expires in around a month.
If one of these groups decides to strike, there could very well be significant repercussions. At this point, I am still advising that shippers work with a logistics expert because they can distribute goods amongst different gateways to get around problem areas.
What advice would you give shippers trying to deal with congestion right now?
We are still seeing congestion at port terminals, and inland transportation hubs are dealing with congestion, as well. The lack of equipment, particularly chassis, has been a very serious issue for some time, and that situation can be challenging for a shipper of any size. I suggest that shippers track the efficiency of each rail provider, trucking provider, or ocean carrier when it comes to securing equipment and moving freight. The best option can vary based on trade lane, inland route, and final destination. Also, a lot of boutique carriers came out during the initial impact of COVID-19. They were created to capitalize on increased volumes—specifically from China to the US West Coast. As the market fluctuates and the fleet of established carrier vessels adapts to handle global container volumes, these smaller organizations are going to become less practical and may even disappear forever.
If a shipper doesn’t already have a plan in place to fulfill holiday orders, is there anything they can do?
Usually, most shipments for the holiday season have been taken care of at this point. However, if a shipper still needs to import holiday goods, or if they are concerned about any other last-minute shipment, I would strongly suggest partnering with a logistical provider who has significant relationships and connections. A singular shipper is not going to have the market access and the established relationships with global carriers to get their cargo prioritized and delivered on-time. An established provider is going to have the market access and capacity to provide expedited, premium, or other specialized and creative service options to fulfill tighter deadlines.