Peak Volumes, Port Congestion, and Air Freight Options
Port congestion. It’s a topic that is still on everyone’s minds months after the initial threat of a West Coast port strike. Other situations continue to contribute to a bottleneck at the docks — inefficient processes upon arrival, chassis shortages, and truck capacity on the drayage side are just a few of the big ones. These types of ongoing issues combined with peak season shipments and things tend to back up in a hurry. In anticipation of the upcoming holidays and the annual shopping frenzy, shipping volumes rose significantly earlier this fall. This year we saw many shippers, faced with delays at the ports, take what may seem like an unusual alternative to keep their shipments on schedule.
These shippers avoided delays at the port by converting their goods to air freight. While air shipping may be cost prohibitive for some shippers, it’s a smart business decision for others. When the cost of a product not getting to its destination on time is more expensive than converting to air freight — for example, a situation that will result in fines from retailers if the product is not on time — that’s when shipping via air becomes a valuable option.
Savvy shippers know that successfully converting to air requires clear visibility and accurate forecasting of last-minute shipping changes. The sooner a decision is made to convert a shipment to air, more savings can be found. Additional lead time opens up air consolidation and deferred flight options, which can be less costly than next flight out services, yet still faster than ocean transport.
After the majority of Christmas products arrived in the United States, the demand for capacity lightens. These low shipping volumes should help ports play catch up. That’s not to say that congestion is no longer a concern. Peaks in volume will continue to happen. Even before people sit down to celebrate Christmas, shippers are already looking to restock inventories. This need combined with the upcoming Chinese New Year — and hopes of avoiding the subsequent week-long shutdown — could cause another rise in volume and further delays.
Rather than rely on an increase in air freight to help lower shipment volumes and control congestion, other fundamental issues at the ports must be addressed or bottlenecks will continue time and time again.
Sri Laxmana has been with C.H. Robinson for 13 years and has served multitude of roles during his career. He has worked in Customs Brokerage, Ocean/Air Imports, Ocean/Air Exports, Business Development and Trade Management for variety of trade-lanes. Sri is currently the Director of the Ocean Services for the Global Forwarding division of C.H. Robinson. Sri is responsible for the global strategy, volumes and revenue for the ocean transportation. Sri holds an engineering and business degrees and is based in Eden Prairie, MN.
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