Freight Companies Brace for Post-Suez Port Backups -

Freight Companies Brace for Post-Suez Port Backups

Logistics operators are bracing for a cascade of sea containers that bring new congestion to supply chains as shipping networks work through backlogs from the Suez Canal blockage.

Some companies are reserving truck transport for inland European destinations several weeks ahead of time or leasing additional shipping containers to ensure exporters can get goods on vessels once an expected surge in ship traffic hits Europe’s ports following the backup at the Suez.

The nearly weeklong traffic jam caused by the 1,300-foot Ever Given container ship blocked hundreds of ships from the waterway, a critical lane in Asia-Europe shipping that accounts for some 13% of global maritime trade, and sent some vessels on a longer path around Africa to avoid the backup.

Engineers freed the wedged vessel on Monday, but the repercussions from the crisis are expected to last for months as shipping lines work to get vessels back on schedule and reposition the metal boxes used to ship everything from apparel to industrial parts.

“The equipment situation in Asia may again suffer from the delays to vessels and consequent containers repositioning not being on time,” said Florence Gautrais, director of global ocean freight for France-based logistics provider Geodis SA, which has about 10,000 shipments affected by the Suez blockage. Ten days from now, she said, “shortages of equipment might impact uplifts and departures to Europe and the U.S.”

Itasca, Ill.-based freight forwarder Seko Logistics is leasing additional boxes from container exchanges, said Keith Gaskin, the company’s group commercial director in the U.K. Seko had 50 containers loaded with customer cargo on the Ever Given, with hundreds more delayed because of the Suez Canal blockage.

Sea traffic between Asia and Europe was already congested before the Ever Given became stuck fast in the side of the Suez.

Ocean Insights, a Rostock, Germany-based freight data firm, said average shipping delays for container ships from Shanghai to Rotterdam were up to 5.2 days in February from 2.1 days in that month a year ago, and that average delays from Shanghai to Antwerp jumped to 9.2 days from two over the same period.

Once vessels delayed by the Ever Given arrive in Europe, “you’re going to have a backlog, because it takes up to 48 hours to unload each ship and there will be multiple vessels arriving at the same time,” Mr. Gaskin said.

To get ahead of the expected rush to secure ground transportation, Seko is prebooking trucks four weeks out, based on carrier estimates of when the delayed shipments will arrive.

The shipping lines may try to make up lost time on schedules by canceling some port calls for ships that make multiple stops in Europe, Mr. Gaskin said.

“In about three to four weeks’ time, we’re going to be suffering with blank sailings,” he said, adding that some vessels might terminate at alternative destination ports if there is severe congestion. “They’ve got to make sure these vessels get back to Asia and working as soon as possible.”

The Suez blockage raises important questions for manufacturers and other exporters who will have to pay closer attention to the availability of equipment and transportation when they seek overseas sales, said Douglas Kent, executive vice president of strategy and alliances at the Association for Supply Chain Management.

Companies need to weigh such factors in the same way they consider production or raw materials constraints, he said. When containers and ships aren’t in the right place, finished goods can stack up at factories designed to hold inventory for short periods while retailers risk missing out on key selling seasons.

“It’s not just the replanning and rescheduling of the transportation piece,” Mr. Kent said. “If I don’t have a shipping container to put it in, do I turn down the order?”
Source: Wall Street Journal

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