CHALLENGES WITH OCEAN FREIGHT
By: Scott Bahr
Recently, Bit Service has come face-to-face with the challenges associated with ocean freight. In our case, we noticed firsthand the dismal state of affairs in the ocean transportation industry when we were looking to import some materials for a few of our mining clients.
Sadly, this struggle is not necessarily new. Ever since the COVID-19 pandemic hit, ocean freight has been plagued with problem after problem—and it’s slowly just been getting worse. There are many reasons for this increased disruption, with the upheaval already created by COVID-19 further compounded by a land-based shortage and logistics issues. The main problem is not having enough truck drivers and other logistics workers to deal with all the incoming freight.
The solution for this predicament is very complex, especially given that a lot of the struggle stems from the fact that consumers have developed a preference and comfort level with ordering things online as opposed to shopping locally. Add to that the pandemic-induced stay-at-home orders that led folks to avoid going out to actual retail stores (enter Amazon shopping on the rise), and we’ve created a perfect storm. With increased online shopping, many of the products we’re purchasing have to be shipped from overseas—which only adds to an already existing pressure point, since we’ve already outsourced a lot of our manufacturing to overseas markets in an attempt to cut costs.
COMPOUNDING LOGISTIC ISSUES
The logistic issues that have arisen with ocean freight, particularly since the arrival of the pandemic, are far-reaching. These global transportation challenges have forced us to take a hard look at—and reassess—our supply chains. The need for supply chain resilience has never been more important than it is in our current climate.
Ocean freight has been hit particularly hard, impacted directly by panic buying, air freight capacity shortages, and closed borders—all of which have led to supercharged stress levels on global supply chains. Manufacturing plants have also drastically decreased production, and this has resulted in plummeting inventory. Simply put: The demand for more goods has placed an immense amount of pressure on ocean freight to deliver (literally).
SOURCING CONVEYOR COMPONENTS
Further compounding the problem is the congestion currently being experienced at ports (Los Angeles is a major one experiencing quite the bottleneck). From the lack of equipment to increased cost pressures, the resulting disruption to inventories is threatening to wreak havoc on end-consumers—and companies by proxy.
And with the holiday season coming up, a time when freight normally increases, this could create even more of a backlog. For Bit Service, in particular, our main pain point is getting a hold of conveyor components, since they're coming from Western Europe now.
THE BENEFIT OF SHOPPING LOCALLY
With the expectation that ocean freight rates will remain at record highs throughout the coming year (at least)—and the frustrations relating to sourcing from overseas showing no signs of waning—there is one smart option we can explore. We can minimize all that strain on worldwide logistics by trying to shop locally as much as possible. It not only helps our communities by pouring money back into vendors and suppliers in our neighbourhoods, but it also alleviates unnecessary pressure and simplifies our entire supply process.
If there is anything we have learned this past year, it’s that planning is essential when navigating our “new normal.” In this case, proper planning is needed to ensure ocean freight capacity is available. At Bit Service, we’re here to help, and our experts are available to discuss your options so you can be prepared with proactive solutions. Reach out to us today.