Updated: Oct 28, 2022
While demand for consumer goods may be easing, the supply chain issues many companies are experiencing still remain—further deepening their earnings pain. The electronics industry has been especially confounded by these supply chain issues as many of the industry’s major players struggle to import products in a timely manner, and in turn, lose revenue.
Many of the electronics industry’s smaller companies are also experiencing their own supply chain challenges. Most of these smaller companies are Less than Container Load (LCL) shippers, who are clients that do not have enough cargo to fill a forty-foot container and prepare their goods to ship in smaller increments.
The challenges many LCL shippers are experiencing have to do with navigating bottlenecks between gateway ports and final destinations. Many times, especially in today’s market, those goods can get bogged down for days at transfer points because the cargo needs to be removed from the large container and repacked into a smaller container for final transport. Additionally, because of the sheer volume of LCL shippers, there is an increased danger that some of the cargo will get damaged during the transfer—lessening the overall profit.
“In a normal market, retailers or manufacturers that ship relatively low volumes of electronic goods are able to do so without delay or incident,” said Anthony Fullbrook, President of OEC Group’s Northeast Region. “However, these are not normal times. As the market continues to evolve, shippers need to think about inland bottlenecks and other pitfalls that can occur during transit that could further delay a shipment because any delay means one more day that your product is not getting sold.”
Under current market conditions, it may be more practical and cost effective to send shipments in a dedicated twenty-foot containers. Commissioning twenty-foot containers for shipments lets your freight avoid many additional delays because the cargo will travel directly from origin to final destination. Also, the cargo will ship as an original container package thus helping reduce a big problem in the electronics industry of reducing pilferage, and cargo damage from re-handling. Finally, 20-foot containers can utilize all available sailings, whereas LCL has limited options.
“If you’re a lower volume shipper in the electronics sector, this is your opportunity to really get some velocity going and get products in the hands of your customers quickly,” says Frank Costa, Vice President of Sales for OEC Group’s New York office. “The old adage, ‘time is money,’ has never been truer than in today’s market, and being creative with your supply chain strategy is the best way for any company to fully realize its economic potential.”