The current complexities of the supply chain and the need to successfully navigate it prompted many shippers at this year’s Trans-Pacific Maritime conference (TPM) to seek out our advice about how to plan their logistics strategies for 2024.
One of the main reasons we were so popular was due to the fact that shippers continue to struggle with how to work around the two of the critical issues affecting the supply chain before TPM, the drought at the Panama Canal and Houthi rebels attacking container ships at the Suez Canal.
According to a recent article in the Wall Street Journal, the drought at the Panama Canal has created a line of more than 50 vessels looking to traverse the canal, while the attacks near the Suez Canal have forced carriers to sail around the African continent, adding more than ten days to their normal travel times,
Both problems have forced many shippers to adjust their timelines and budgets. But the greatest concern among shippers is that no carrier company has been able to adequately adjust to these problems, causing rates to be inconsistent, prompting them to seek out guidance for alternative strategies.
“There is nothing wrong with asking for help, especially in an environment that is proving to be very challenging, especially for shippers who collaborate directly with carriers,” said Anthony Fullbrook, president of OEC Group North America. “Right now, the only way to succeed in this environment is to work with an experienced and connected logistics expert. Going it alone is not a prudent approach as the only solution is more options not less.”
Even carriers remain uncertain about the current environment, causing many shippers to rethink who they can trust. There are also well-grounded fears throughout the industry that workplace related issues, specifically the ILA contract negotiation, could shut down ports all along the U.S. East and Gulf Coast. Many experts believe that the potential for a work-stoppage during peak and holiday seasons is very real.
“With all the geopolitical, environmental, economic, and workplace related issues affecting the industry, I think it is safe to say that the supply chain is a complicated as it has ever been,” said Nick Klein, Vice President and Head of OEC Group’s Chicago branch. “Shippers need to be looking at the entire picture to understand the potential impact all these issues will have on their business and plan accordingly. Unfortunately, with limited options their best bet at success is to work with a seasoned pro and diversify their deliveries. This is the only strategy that has been proven to work to avoid any potential supply chain snags.”