Is your company prepared to adapt its logistics strategies to mitigate the impact of current congestion at China’s port? With the port’s current blockage, the global supply has taken a giant hit since it is one of the most important hubs for international trade, which is a critical hub for international trade.
With increasing cargo volumes, shippers and overall businesses are facing significant challenges with moving and delivering their goods. Having a contingency plan and knowing what strategies to implement is significant to help your business mitigate the possible impact on its operations.
Understanding the Asian ports’ congestion crisis
Major ports in China, such as Ningbo, Shanghai, and Jebel Ali, are currently experiencing severe congestion mainly due to seasonal fluctuation around the Labor Day holiday and severed by the current geopolitical disruption crisis in the Red Sea, which is leading to the returning of many vessels as well as a shortage of containers.
Causes of the congestion
Besides the reasons mentioned above such as the Labor Day increased demand, congestion at ports in China is also due to labor shortages around COVID-19 outbreaks and lockdowns.
With a lot of restrictions on crew members disembarking and just if this wasn’t enough, the latest unexpected weather events, such as Dubai’s rainfall, have all compounded into causing these delays and disruptions in the port’s scheduling and operations.
Impact on global supply chains
Congestion at ports in China is having a significant impact on global supply chains because it is causing tremendous shipping delays and extended cargo transit times. Some ships have even reported waiting periods of over a week before they can unload their cargo.
This is critical to supply chains because the delay not only affects finished goods but also the moving of raw materials which are key to the manufacturing of other products.
All these delays have caused an increase in freight rates that have skyrocketed in just one month. Companies importing goods are having to deal with these challenges, with their profit margins being greatly impacted.
Adding to this, there are also additional fees generated by the detention of shipments due to the delays.
The consequences of Congestion at ports in China companies are facing production stoppages; because of shortages of critical raw materials, inventory management challenges with unpredictable delivery times, missed sale opportunities, and reputation damage resulting from missed delivery timeframes and out-of-stock items.
The most affected ports in China
Congestion at ports in China presents a current challenge globally, and here’s what’s happening at the major ports affected:
- Shanghai, Ningbo, Qingdao, and Shenzhen: these ports are all experiencing high COVID-19 infection rates among workers; most factories are operating with a quarter of personnel, which is causing factories to struggle with maintaining production or being unable to deliver normal production levels. Reports predict the rise of even more COVID-19 infections weekly, which will further impact operations.
- Jebel Ali: even though this port is not located in China, it is the major transshipment hub of Jebel Ali in the UAE and this one port is being affected by the vessels being rerouted from the Red Sea due to the crisis.
Strategies for shippers to mitigate the impact
Companies need to be aware of the current situation and challenges and implement strategies that will allow them to better navigate the current crisis. Here are some actionable strategies that can help your business through Congestion at ports in China.
Diversifying port choices
To avoid the current congestion at ports in China, exploring new and alternative routes will reduce your dependence on the conflicted ports, this means shifting cargo to neighboring countries or China ports that are less congested at the moment.
Leveraging ocean and air freight solutions
An approach taking advantage of the speed of air freight and combining it with ocean freight by shifting a portion of cargo to it. This can help you to bypass the bottlenecks and win time in your delivery.
Air freight can also be used for shipments that have a higher priority, such as the ones needed to maintain production and avoid stockouts.
EP Logistics has a strong relationship with all major air carriers, allowing us to offer our customers the ability to move air cargo on time. We bring a complete package of air logistics services through our global network, experienced professionals, and advanced technology.
Customs brokerage services
Efficient customs brokerage services are key to overcoming the challenges of the congestion at ports in China; since customs brokers are experienced with the China Customs specific customs regulations, documentation requirements, and clearance procedures they can streamline the customs clearance process preventing further delays at the port that can add up to the already troubled congestion.
EP Logistics Customs Brokerage services have highly qualified customs experts, simplifying the process of import and export declarations, duties and taxes, permits, and licensing so that you don’t have to worry.
Our experts ensure a quick customs clearance process to avoid further delays that add up to the current Asian ports congestion.
Implementing technology for real-time tracking
Now it’s a time when having real-time tracking technology implemented is crucial. With the uncertain and unpredictable shipment dates and schedules, accurately managing your inventory will require some extra help that ensures your data is accurate and prevents stockouts.
Having automated alerts and notifications will allow you to oversee the movement of your materials and goods.
Optimize your routing and scheduling to bypass the Asian ports congestion and allow you to keep a smooth communication with shippers, carriers, and logistics providers.
The role of 3PL providers in addressing port congestion
Partnering with a 3PL Provider during these crucial times will not only give you peace of mind, but it will ensure that your business stays afloat and can adapt to the current congestion at ports in the China crisis.
3PL has access to many types of carriers for effective alternatives and will provide the expertise needed to apply the strategies that will help you mitigate the impact of resulting port delays.
You can trust EP Logistics to provide you with the best logistics solutions to help you better navigate this situation overcoming challenges and minimizing disruptions preventing further delays and taking care of your customer’s satisfaction.
E-commerce Fulfillment Services
Having specialized e-commerce fulfillment services will help you maintain business continuity during disruptions because these services provide your business with:
- Access to multiple distribution centers
- Inventory management
- Planning of alternative routes and production schedules
- Real-time tracking technologies
- Real-time inventory monitoring
- Access to a wide range of delivery services
All these benefits combined will ensure the continuous flow of your goods.
At EP Logistics, we understand the unique challenges of the current situation, and we bring our expertise and worldwide reach to your business to ensure that your products get to your customers quickly and safely. With our Ecommerce Fulfillment Services, your goods are in good hands.
Preparing for future disruptions
Developing a contingency plan that includes strategies for diversifying routes and partners, investing in real-time visibility technologies, and fostering strong relationships.
Reliable logistics providers that give your business access to resources that ensure operational continuity through crisis, will help your business overcome any future challenges that come up in the global trade world.
Building strong relationships with logistics partners
It’s important to build strong partnerships with reliable logistics providers because they not only have the expertise but also provide you with the services your business will need in case of a contingency.
Even without one, having these partners will ensure the leverage of your supply chain at all times saving you money with their advanced route planning, discount rates, and team of experts.
Investing in supply chain technology
The difference a real-time supply chain technology can make is huge, it takes the guessing out of the equation, ensures your inventory is always on point and improves the overall management of your goods and materials. It also makes communication with all other parties involved in your supply chain more accurate and efficient.
Major ports like Ningbo, Shanghai, and Jebel Ali are facing severe congestion due to seasonal fluctuations, geopolitical disruptions, and labor shortages. Partnering with an experienced 3PL expert and a reliable company like EP Logistics will ensure your business stays afloat during this world crisis.
Hiring EP Logistics can help your business navigate these challenges effectively. We offer diversified port choices, as well as fast air freight solutions to ensure the timely delivery of your merchandise.
With strong relationships with major air carriers, experts, customs brokerage services, and real-time tracking technology, we offer reliable solutions for your business to maintain its supply chain efficiency and your customers’ satisfaction.
Contact us to find out all the options we have to help you stay competitive.
