A logistics company has used slogan “Either We change or we die” as the subject line for all of the emails they send to their customers. The slogan sounds heavy and stressful, but It describes exactly about the reality that the global supply chain is experiencing/facing to. Currently, the import-export, transportation and logistics industries are experiencing an unprecedented crisis in history.

For example, the period from March to August in 2020, Ocean Freight of 40 Refrigerated container routing USA approximately 4000-5000 USD per container. However, in 2021, the number is increasing in uncontrollable  way.  The Ocean Freight for routing USEC (United States East Coast) is around 15,000USD per container 40RF, It is predicted that this freight will continue to increase without showing any signs of stopping. The freight is highly increasing but It does not mean pay money, enterprise will have booking. In order to you have space on shipping vessel, the customer have to watch every moment, scramble, find other forwarding company to get available booking. Getting a booking is like playing an auction, the higher the bidder and having a good relationship has more chances of getting one.

The crisis is not only in freight rates, it is also in the shortage of empty containers. The freight information service American Shipper warned that there is evidence that, until 2022, the seafood industry and other sectors will continue to struggle to find enough containers for import and export goods. Import-Containers remain at their peak and the ratio between storage and consumption remains “low”, which is unthinkable to return to normal level in this year. There are too many difficulties for enterprise when they have booking in hand, but they still have to run around the Depot all night to find the empty containers.

Having an empty container is still not peaceful when you have to wait anxiously to see if the carrier will be delayed? How many days delay? Previously, the time it took for the shipping to depart from Cai Mep port to Los Angeles – USA took 15-20 days, now it has to add 5-10 days or more depending on the situation of the ports. Expected 2-3 days has become normal and longer in ports affected by Covid (7-10-16 days..)

So what is the cause of all these crises?

     1. Covid-19– The silent killer:

Right! Undoubtedly, Covid is the main cause of the economic crisis in general and the crisis in the import-export and logistics industries in particular. The US and Europe – the world’s two largest markets have experienced a not-so-peaceful Covid year. In consequence, imported containers could not release the goods because the factory was closed or there was no driver to pull containers to the warehouse. Tens of thousands of containers in the US cannot be turned around, leading to a severe shortage of containers in Asia

     2. The rising of consumption:

The expansion of shopping habits make the import and export also increase more. The growth in demand for goods increased faster than the investment in building new aircrafts and ships. Moreover, the shipbuilding industry was also delayed due to a labor shortage because of Covid-19.

So how do we change to survive?

Try to adapt, it’s best not to expect everything to return to the way it was before the epidemic. Stop whining and define yourself back to the “New normal status in the business supply chain”. From there, enterprises can actively plan their business and produce better.

By Kathy / Sandy (Logistics Team).

Reference: doanhnghieptiepthi.vn