As we enter into the second quarter of 2021, port congestion continues to be a pressing issue in the shipping industry. In this month’s shipping update, we’ll cover all you need to know about what’s happening and what you can do to ensure your shipments get where they need to be when they need to be there.
Industry Update: Port Congestion
Experts now suggest the shipping industry will not return to normal until the end of 2021. A few months ago, the issues mainly centered around Asian ports, but in 2021, port congestion has shifted to the West Coast of the US. In Los Angeles and Long Beach, shipping container volume has doubled. Where a container used to sit at port a maximum of 3.5 days, it could now be there up to 8 days.
The reason: an influx of imports from Asia.
Consumer spending has increased, and with US stores reopening and restocking, their orders have jumped to keep up with demand. People are buying more products these days, rather than services, resulting in a spike in imports that creates record-breaking numbers monthly.
Current Status: Case Study
Peloton, a company that saw a significant uptick in sales during the pandemic, has also experienced significant delays in getting bikes and equipment to customers. The company’s CEO John Foley told stakeholders that “the global increase in shipping traffic has added significant delays to all sorts of goods coming into US ports, including Peloton products.” In fact, Peloton has taken drastic steps to get their products in the hands of customers, including moving to air shipments, which has affected their bottom line due to the increased costs, nearly 10 times higher than traditional shipping.
Projections
As of now, the high number of imports is forecast to remain through the summer. In the Port of Los Angeles, the executive director said that, even if no additional ships arrived, they’d still have a month’s work ahead of them. That’s a direct result of not only port congestion but COVID-19 implications, including getting 100,000 employees vaccinated and ensuring that everyone who returns to work is healthy.
The National Retail Federation is predicting that 2021 will be a record year for sales growth. Much of that is driven by online sales, which increased 21.9% in 2019 and are expected to grow 18–23% this year.
What does that mean for you? Simply put, the port congestion will continue. And how it all turns out will rely heavily on what happens with the pandemic.
Recommendations
While there’s little that individual companies can do to combat port congestion, staying ahead of the situation is important, especially for customer service. Companies need to communicate with their customers and let them know if there will be delays and what to expect.
On a case-by-case basis, Cyclone Shipping will evaluate alternative ports to see best options of routing of your cargo in order to expedite.
Generally speaking, many insiders suggest that the entire shipping industry needs an overhaul to deal not only with the current port congestion issues but future challenges as well. From infrastructure to technology, there is always room for improvement.
Cyclone Shipping Has Your Answers
In addition to our monthly shipping update, we encourage you to reach out to us at Cyclone Shipping. We keep our fingers on the pulse of the industry and know about everything that’s happening, from port congestion to shipping costs. Contact us to develop your strategy and keep your shipments moving.
