Can freight logistics during Covid-19
Martha Rojas comments on how canmaking stakeholders can stay one step ahead during this complex time of freight logistics
It’s now just over a year since the covid-19 pandemic changed our world. In its path, Covid 19 caused disruptions in daily living, consumer patterns, supply chains and impacted economies on a global scale. International trade and shipping networks are still trying to adapt to the current fallout and prepare for the future.
The sudden closing of trade with China during the first quarter of 2020 affected the availability of consumer goods, impacted global freight movement, and e-shipping. It stopped most travel, and decreased general spending, bringing international trade to an unprecedented slowdown, with plummeting cargo volumes.
During the second half of 2020, consumer spending finally increased and economies started to rebound. With the promise of quick vaccine developments and the re-opening of shipping goods from the far east, a bottle neck of freight ensued at the end of 2020 and into the first quarter of 2021. Specifically, global ocean containervolume demand which continues to ripple through container dependent supply networks. The net result being a strain to all freight transport modes, from trucking, to cargo vessels, to air cargo. The backlog is causing worldwide delays, shipping equipment and space shortages, with shipping costs more than doubling in most trade lanes.
The challenge of global demand for metal packaging
Covid-19’s effects have also contributed to the growth in demand for metal packaging worldwide, as evidenced by the number of new can projects scheduled for the next few years in the USA. The major disruption to supply chains, shipping networks, ports, rail, trucking and most logistics services worldwide has had a direct impact on freight costs to canmakers and suppliers alike.
In the US, the consistent growth in consumer purchasing through ecommerce has US retailers projecting that imports in the first half of 2021 will increase 22.1 per cent over the same period last year and, more importantly, each month will set a new record for import volumes for those months, causing continued congestion at all shipping ports.
The extraordinary number of container ships waiting to offload at all US ports, especially at the ports of Long Beach and Los Angeles is predicted to remain at an all-time high. This situation – of vessels loaded with containers and anchored at the biggest gateway for American trade with Asia – has over 20 ships waiting to berth on a daily basis, with more ships arriving each day. The average wait for berth space is over 10 days causing major delays all around.
Unexpected events such as the recent winter storms in the US and the current Evergreen vessel blockage in the Suez Canal have further complicated the already dire situation. According to the Suez Canal Authority:
“The blockage is stopping other ships from passing and creating long tailbacks in the canal. Almost 19,000 ships have passed through the canal in 2020 – an average of 51.5 ships per day”
As of this writing, there are over 300 vessels waiting at anchorage waiting to pass through the canal with is a steady inflow of vessels reaching the canal each day; already costing billions to Global Commerce.
Alternatives for consideration in moving freight
Due to expensive and unreliable ocean freight, shippers are looking for options where possible; resulting in increased demand for shipping via air freight. These additional volumes of freight combined with the already diminished and limited capacity from passenger jets, will inevitably increase freight costs.
The overall congestion affects trucking as well. Trucking volumes, costs and employment have been climbing since the summer of 2020, rebounding rapidly from an early pandemic slump. In the first quarter 2021, importers are rushing to replenish inventory, however; with limited trucking capacity, freight rates continue to increase. This will likely remain the case through at least the first half of 2021.
While it would appear that this global situation will remain into the third and fourth quarters of 2021, the shipping industry continues with endeavors to find solutions, improve productivity at ports, railways and trucking, in order to handle the cargo volumes that are expected in the coming months. We, at John Good Logistics are implementing alternative and innovative approaches to achieve the best possible logistics solution, at a reasonable cost, in our effort to meet required delivery timelines for our customers.
What does this mean to the stake holders in the can business:
- Global demand for space on cargo vessels and cargo aircraft will continue to be high for the next few months, while supply will remain low, slowing down the broader supply chain.
- It’s very possible that containers and space on vessel will not be available for weeks, even months.
- Rates will fluctuate weekly.
- Expect delays and high costs for all movement of goods.
- Forecast your next project shipping dates as early in the project as possible and allow extra time for delay regardless of shipping mode: Ocean, Air, Truck, Rail.
- Consider different and innovative ways to move your goods.
- Planning with your shipping partner to allocate space and equipment is key to obtaining better coverage and meeting your project timeline.
Martha Rojas is Executive Vice President, USA, John Good Logistics, Inc.
Martha has worked in logistics for over 30 years and have specialised in shipping Can manufacturing equipment, supplies and finished goods. Having handled over 250 canlines to worldwide destinations, she has worked with most of the major canmakers and their suppliers during her career. She now heads up the sales department for John Good USA.
In the US, John Good Logistics Inc. is strategically located the New York/NJ Metropolitan area and are a part of the John Good group of companies headquartered and established in the UK since 1833. The John Good group has a continued history of Global strategic expansion. Activities include all modes of General Cargo transport, Project Forwarding and specialised moves by sea freight and air freight, allowing customers to take advantage of the company’s specialised expertise in project logistics for various industries, as well as the additional opportunities it brings through its global network for general cargo and other modes of transport.
John Good has a vision to be the best in the business with a long term commitment to excellence. In addition to being a world leader in global logistics, the company embraces business transformation by investing heavily in its people, innovation, information technology and a digital strategy.