Shipping household goods internationally continues to be a challenge. Port delays, container imbalances, hauler issues, and protests in certain locations have led to an unprecedented shortage in available containers. Longer booking and delivery times, delays, cancelled services, and increased pricing continue to plague the industry as it works to combat the challenges. Aires’ CEO, Jeff Wangler, has served as U.S. President of the Overseas Shippers Association (OSA) throughout the pandemic and for more than 12 years. Jeff also worked at the Port of Baltimore for a steamship line in the early 1980s. We recently sat down with Jeff to discuss the ongoing problems plaguing the industry and what OSA membership means for Aires.
Jeff, thanks for taking a few moments to discuss this critical issue today. What are the major problems faced going into the 2022 summer season?
There has been and continues to be a “perfect storm” that has plagued the shipping industry. These problems began before the pandemic, but COVID-19 has turned a tough situation into an unprecedented challenge, but I look at any problem as an opportunity to excel, and this is an area where our independence really helps us shine. We all know the general problems, but the specifics can be tough. A few examples I heard from OSA leaders in EMEA:
- A German freight forwarder noted that steamship lines have made as many as 30 changes to just one routing; they also noted doubled transit times for reasons such as ships not calling the port or discharging a container at another port that wasn’t the final destination.
- Vessels are waiting 1-3 weeks to get into many ports. (Editor’s note: As just one example of this, please see the image below from vesselwatch.com detailing the vessels in Los Angeles/Long Beach waiting at port with many more outside of port range.)
- There are 600,000 containers waiting to exit Busan and 1.4 million containers waiting to exit the Shanghai port. The Shanghai, Xingang/Tianjin, and Ningbo ports are working approximately 40-50% of the time, with hundreds of vessels waiting in front of them.
- Some China ports are closed due to China’s Zero COVID policy; there are reports Hong Kong may shut down as well.
So, is the situation better or worse than it was a year ago?
There was a spirited debate between OSA members on this issue, and while some felt we might “see daylight” at year-end, most were much more pessimistic and believe this may continue on into next year. I am among those who believe that.
One bit of good news is that we have seen some rates come down in the past couple of months, but this has been lane specific. We constantly seek the best routings, but obviously we first seek available space and then search for the best rate; the pressure to seek space first could remain for quite some time. We are thankful that we have been a member of OSA for many years. They are the largest household goods booker in the world, and this power is very helpful.
Has the situation in Ukraine affected shipping?
Yes, at least on a localized basis. A German OSA member noted that 50% of drivers in Poland and Germany are Ukrainian, and many of them have returned to Ukraine to fight. This has led to a driver shortage in those countries.
What can clients do to mitigate as many of these issues as possible?
We’ve been saying this to everyone: Book early and book often. In the past, clients have waited to book their shipments until an employee’s home was under contract. With the shifts in the housing and household goods shipping markets, this is no longer advisable. We recommend that clients initiate new relocations as soon as possible (6-8 weeks prior to the start date is ideal) and avoid date changes and cancellations.
As an independent freight forwarder and member of OSA, we have preferred status with the leading shipping partners around the world. We are often able to find solutions that others cannot. However, moving mountains isn’t feasible in the current landscape. Strong planning and proper guidance/advice to your employees is critical to success. Aires remains well positioned with our partners and clients to address shipping challenges, and we look forward to weathering this storm with them.