This fireside chat recap is from FreightWaves’ OceanWaves Summit.
TOPIC: Shipper strategies to counter congestion
DETAILS: A look at how importers can minimize import shipment delays and what the prospects are for future ocean freight pricing, given all-time-high anchorage levels. Also, how long could current peak conditions actually last?
SPEAKERS: Nerijus Poskus, vice president of global ocean, Flexport, and Greg Miller, senior editor, American Shipper and FreightWaves
BIO: Poskus leads long-term ocean strategy, working with clients and carriers to innovate ocean services. Since joining in 2015, Poskus has scaled Flexport’s global ocean carrier partnerships, trade lane coverage and internal freight operations. Prior to Flexport, Poskus worked on the trans-Pacific trade lane management team at Kuehne + Nagel.
KEY QUOTES FROM POSKUS:
On how shippers can avoid port congestion: “The opportunities are still out there, but they’re getting harder and harder to find. There were four or five extra loaders this month [September] to Seattle — and some of the terminals in Seattle are congested but actually some are not. Some extra loaders were also sent to Oakland. While Oakland was very congested two months ago, last week there were nearly zero [vessels at anchor]. Another option is to ship LCL [less-than-container-load] using premium ocean services — for example, those by Matson, which are going around most of the congestion because it owns its terminal in Los Angeles. Also, one thing Flexport has done, and it’s not just Flexport, is we have a setup with Valor Victoria rail line, which has trains running on UP tracks but they have their own trains and they are able to load much faster because they are actually doing it from a different location.”
On how long it now takes to get cargo from China to the U.S.: “It depends. If you are using rail in the U.S. it will take significantly longer. If you’re importing from anywhere in China or Southeast Asia and you’re shipping to the middle of the country using regular ocean services and regular rail, I would bet your goods will not arrive in time for Christmas. They’ll probably only be available next year, with all the congestion. The lead time can be anywhere from 30 days using premium ocean services for local moves to California, to over 100 days [using regular services and rail] for IPI [inland point intermodal] moves.”
On whether congestion will spur widespread sailing cancellations in Q4: “With up to 70 ships at anchor off Los Angeles/Long Beach, that will probably result in a similar amount of blank [canceled] sailings in the fourth quarter. With ships at anchorages at an all-time high, I expect more blank sailings on regular services in Q4 than Q3. What is helping a little bit is that there are already a lot of new services, and there are other new services that are scheduled to be launched in the fourth quarter. So, blank sailings will go up but new services will also go up, which should alleviate some of the pain points. It doesn’t solve anything in terms of congestion in the U.S., but it should help shippers to leave China — not on time but at least within a reasonable amount of time.”
- How supply chain chaos and sky-high costs could last until 2023
- Container ships now piling up at anchorages off China’s ports
- Just how many containers of cargo are stuck off California’s coast?
- Record shattered: 73 container ships stuck waiting off California
- How high can container shipping profits go? Will 2022 top 2021?
- In the eye of the congestion storm: Q&A with Port of LA’s Gene Seroka
- Shipping chaos gives top importers ‘massive competitive edge’