As every importer knows Peak Season Shipping volumes usually dissipate once the holiday shipping season has “officially” ended at the end of December each year. But this year, and next for that matter, will definitely be a different experience from the past. As reported by Wall Street Journal, many US Port executives have been reporting that they anticipate congestion delays to continue well into 2022.
These ports are already congested and there are many additional ships just waiting to berth at West Coast Ports of Long Beach and Los Angeles. Mario Cordero, Executive Director of the Port of Long Beach states that “I don’t see substantial mitigation with regard to congestion that the major container ports are experiencing. Many people believe it’s going to continue through the summer of 2022.” Adding to that belief is Griff Lynch, Executive Director of the Georgia Ports Authority who stated “We think at least midway through 2022 or the entire 2022 could be very strong.”
The major US Ports have forecasted container totals to exceed 2.37 million in August alone according to a Global Port Tracker report. The National Retail Federation has estimated that 25.9 Million containers for the year 2021, breaking the record of 22 Million container load total from 2020.
As most importers have come to realize, these port congestion delays are only the beginning of the problem. Once the ships are unloaded, the goods need to be moved inland to distribution points and ultimately to the final consumer. Capacity issues within the US trucking and parcel industry have not abated and there is no magic bullet to relieve those capacity issues. Shortages of items we usually have no problem obtaining will obviously continue and add to price increases based solely on the laws of supply and demand.
Obviously freight costs will continue their upward trend with some importers seeing ocean freight rates increase over 500%. So, in addition to dealing with delays in getting products into a manufacturer’s or retailer’s inventory these manufacturers and retailers will have to deal with budgetary issues for at least another year.
What is your company doing now to control the movement of its goods to support its manufacturing requirements or retail customer needs while at the same time maintaining a budget that ensures your company will remain a viable business well into 2022? Let’s have a conversation.
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