Questions from exporters…
Why are there historic delays in the export shipping world right now when all I’m hearing about is a surge of imports? Shouldn’t that be a good thing for exports?
Empty containers are at a premium in Asia currently because of the huge demand for imports from Asia to the United States (the COVID-19 catch up). As a result, steamship lines don’t want their empty containers waiting to be loaded for export, even if they are going to Asia. Current rates for imports are very high, so steamship lines want empties back in Asia to be loaded with cargo bound for the United States or Europe.
I’m experiencing unprecedented disruptions in my supply chain related to shipments. Is this the norm?
Unfortunately yes. We are advising clients to plan for continued and unforeseen disruptions.
- In China, the Yantian port area, a major transport center in Guangdong, suspended operations in late May due to a COVID-19 outbreak. Service continues to be impacted, creating a lag up to five weeks. Up to 40 ships waited to berth as of June 8.
- In Chicago, a chassis shortage has left 1,500 containers stacked awaiting transport.
My container is at the port ready to load. Why was it rolled to another vessel?
Vessels currently are overbooked, and steamship line allocation teams are moving overflow to later vessels, as needed. In some cases, bookings are rolled forward several weeks.
Why are rates going up drastically, and why am I waiting so long to have a shipment load?
Steamship lines are overbooked, which limits sailing options. Several steamship lines are actually turning down bookings (especially for cargo going to Asia) due to space issues. Lines accepting bookings and with space availability are generally the more expensive carriers. All steamship lines have announced general rate increases, sometimes with new increases effective each month.
I made a booking a month ago. Now I’m being told there is no booking; I may not be able to load for several more weeks; and it may cost more. Why?
Steamship lines are overbooked. Some are cancelling bookings at the last minute, before equipment is released for loading. We then have to request a new booking, with a different carrier, and at an increased cost. The cost may have gone up for one of several reasons including monthly GRIs as noted above.
The sail date on my export container changed multiple times, and as a result, I’ve had to change my loading date each time. Is this happening to other clients? What are my options?
Yes, this is happening frequently right now. Because of the current congestion at the ports, steamship lines are changing departure dates constantly. For some vessels, the sailing is changed daily. This causes ripple effects throughout the supply chain, even impacting rail service in the Midwest with booking changes and/or delays. If you have not pulled your container, the best option is to pay close attention to these changes to make adjustments within the supply chain that avoid detention and storage fees.
My container is loaded ready for shipping, and I just found out that the earliest receiving date has been pushed out one week because of the congestion. Now I have to pay the trucker additional fees to store my container. What are my options?
While we know everyone wants more options right now, the best choice in this scenario is to have the trucker hold the container until the rail can accept it for transport to the port. Plan to pay for chassis fees and storage fees to cover the trucker’s additional costs.
Unfortunately, this is becoming a common situation due to congestion. Communicate honestly with your customers that the costs for shipping are going up because of the delays resulting from congestion and recent February winter weather here in the United States. Be sure to communicate longer transit times should be expected with extensions to deadlines.
I am being billed additional chassis rental, container per diem charges and redelivery fees. Why?
Due to port congestion and the severe winter weather in February, the rail lines have imposed embargoes. Some are only accepting a limited number of export containers per day, sometimes not at all. Unless there is an announced complete embargo, the truckers don’t know if they’ll be able to in-gate until rail billing is submitted or until they receive a notice from the rail that receiving is closed for that day. When they cannot in-gate, one or more of these fees are charged.
I have shipped hazmat categorized goods for years without issue. Recently, I’ve experienced several problems that have resulted in extra charges. What has changed?
Hazardous cargo requires final approval from the steamship lines hazmat team. When congestion is minimal, this process is normally smooth. But as the congestion increases so do delays.
Final hazmat approval cannot be requested until the container is loaded, and all parties have signed the dangerous goods form. Rail billing cannot be requested until there is final dangerous goods approval from the steamship line. These processes are taking longer than normal due to people who process the paperwork working from home (and in some cases being outsourced professionals).
- If there is no rail billing when the container gets to the rail, the trucker takes the container to their yard for redelivery, resulting in a redelivery fee and additional chassis rental.
- If dangerous goods filings are not approved and/or rail billing is not in before the rail cut off, the booking can be rolled and rail billing has to be applied to the new vessel with a delayed rail earliest receiving date and cut off resulting in additional chassis rental fees and possibly per diem charges (container rental charged by the steamship line if the container is out longer than their standard allowed time).