Impact of Delays and Disruption on the Global Shipping Industry

Unprecedented.  That’s a word that has been used many times to describe the multitude of economic and social disruptions that have taken place in the wake of the COVID-19 pandemic.  As such, we have seen delays and disruptions to supply chains and normal business cycles, which have had a tremendous impact on various companies across a broad spectrum of industries.

As it relates to the global shipping industry, significant delays and disruptions are creating shipping backlogs in many freight markets around the world. And, as the shipping demand continues to rise, so does the cost.

 

This is a situation that remains very fluid, with different areas of the world being more or less impacted at different times.

That is why it is critical for Daryl Flood to not only closely monitor this situation, but to also communicate with our clients on a frequent basis about what is occurring. We recognize how this directly impacts their businesses and their own bottom lines. So, we are committed to keeping each of our clients abreast of any and all new developments as they arise, so that they can plan accordingly and make informed business decisions.

Disruption of International Trade

The magnitude of the disruption was echoed in a recent article published by the New York Times, entitled: “I’ve Never Seen Anything Like This: Chaos Strikes Global Shipping.” The article describes the current situation in which international trade has been disrupted by the pandemic, resulting in higher costs for the shipping of goods, thus compounding the challenges of the global economic recovery.

It states that this situation began in the early days of the pandemic, when people started placing massive orders for various goods, many of which were coming from factories located in China. These goods had to then be carried across the Pacific Ocean in containers atop enormous shipping vessels.

Over the past 12+ months, the demand for shipping has continued to rise and has outpaced the availability of containers in Asia. This has created a container shortage, as well as huge backlogs at American ports.

Further exasperating the situation has been the limited availability of dockworkers and truck drivers, which are needed to load and unload containers, and move them to other locations. This means that goods are often stranded on ships that can’t be unloaded.

Challenging Freight Markets

So, which freight markets are the most challenging?

Although we are currently seeing delays in freight markets around the world, it has been particularly challenging for shipments that are coming out of Asia and the Middle East. As a result, there has been a 300 to 400 percent price increase for shipments coming out of both East Asia and the Middle East. It has also been difficult to get sailing vessels from the Middle East to North America.

Additionally, getting shipping containers off the West Coast of the U.S. has become challenging. For example, the Port of Long Beach has become overcrowded by vessels coming from East Asia. So, the overflow has been going to Oakland, California. This has created a situation in which there are vessels that are anchored and waiting to be offloaded, and cargo that is waiting to be loaded.

Unfortunately, this situation is out of our control, since it is related to the global shipping backlogs, and the fact that demand is outstripping supply.

Proactive Communication is the Key

Our business and our customers heavily rely on our ability to proactively communicate, and to set realistic expectations whenever critical changes occur in the global freight markets. For that reason, we are staying in close contact with all of our corporate clients and setting expectations at the very onset of every move. We keep them informed about the substantial disruption and delays in the various markets, and how that might impact their move timeline.

Likewise, we are discussing the other elements that could impact our clients, such as price increases, which sometimes can occur without any notice, based on what is happening globally in the shipping industry.

We also have internal processes in place that notify us about any shipments that get bumped, and we provide shipment reports to our clients on a regular basis. This informs them of the status of their shipments, and highlights anything that has been delayed.

And, although our clients understand that Daryl Flood is not the cause for the delays, they are often experiencing disruptions within their own supply chains. So, we recognize the importance of increasing the level of communication that we have with them, and their need to stay completely informed every step of the way.

Additional Impact to Clients

Delays and disruptions can also impact other aspects of a move for our clients. In some instances, a delay in shipping can make it necessary for a client to extend an employee’s temporary housing for a few weeks or even longer. This can obviously increase the cost for that particular element of the relocation.

Our clients might also encounter administrative issues related to the additional time it may take for an employee to secure a passport or other immigration hurdles, which could impact travel plans and/or the ability of a shipment to clear customs.

All of these issues can potentially impact our clients’ international relocation plans. For that reason, we are being extra diligent in our commitment to providing the highest level of service delivery, while remaining focused on navigating the current challenges associated with the global freight markets.

How Long Will This Last?

While it is difficult to predict how long this will last, we believe that it will persist for the next several months, and possible through the end of this year.

Again, we are monitoring the situation very closely, and providing the most up-to-date information to each of our clients.

At the end of the day, you want to make sure that you have a moving partner that can help you through any and all challenges that may arise. Daryl Flood is such a partner.

Please contact us any time!