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Ashley Klepach FourKites headshotAshley KlepachProduct Marketing Manager, FourKites

Shippers have been dealing with a tumultuous ocean freight market for a number of years and it is not slowing down any time soon. In the first half of the year, labor shortages, political conflict, raw material shortages, inflation, rate increases and limited product availability greatly disrupted global supply chains and caused delays. And the disruption continued in the first half of 2022 with imports seeing dwell times that were 20% or higher compared to last year for the first five months.

In response, demand for ocean visibility grew. During the first half of 2022, the FourKites platform saw ocean freight volume increase 230% compared to the same time last year.

More specifically, exports in the first half of 2022 saw a significant jump year-over-year, with volume 184% higher than it was a year ago as new customers joined FourKites or existing ones increased the loads they track. Meanwhile, imports saw an increase for the first half of the year — by the end June 2022, import volume was 116% greater than the same period last year.

While customer growth drove meaningful volume, the increase can also be attributed to shippers increasing their inventory and safety stock to fill store shelves or fulfill orders.

During the pandemic, retailers saw low product availability due to delays and port congestion, which translated to a lack of customer loyalty and high transportation costs. As we approach the holiday season, shippers want to ensure that product makes it to store shelves for time-sensitive promotions. Historically, retailers have seen increased delays, longer dwell and higher transportation fees. It is also more difficult for operations and demand planning.

Improving Conditions But “Normal” Is a Long Ways Away

“Every section of the supply chain moves slower with congested terminals, depots and warehouses, and a general lack of staff and drivers to keep the pace,” says supply chain veteran Glenn Koepke, FourKites GM of Network Collaboration. “The situation will remain very challenging for about 18 to 24 months. But things will trend toward stabilization by early 2024. Carriers have added capacity and the lack of equipment should resolve.”

Indeed, despite the consistent ocean chaos that continued in 2022, we see signs that it is starting to improve. According to Bloomberg, the number of container ships dwelling in the Port of LA-Long Beach shows a decreasing trend for the first half of 2022, recently hitting a new low. This is a positive sign that congestion at one of the busiest U.S. ports is improving and reducing container dwell times, which could mean reduced fees for shippers.

Historical chart of container ship volume at the LA-Long Beach Queue. Source: Bloomberg

However, shippers cannot rely on market conditions to mitigate disruption. Instead, they should take control of what they can to minimize the negative impacts of whatever comes next. More shippers are looking for supply chain visibility solutions to add more resilience and efficiency to their supply chain networks for when – not if – disruptions occur.

Tips for Managing Ongoing Ocean Disruption

Build resilience in their supply chain

What is clear from the first half of 2022 is that disruptions are not slowing down. To stay afloat, shippers must find ways to build resilience into their supply chain. One way to do this is to diversify particular lanes or ports that have seen their share of disruption to limit the impact to the shipper’s supply chain network. Also looking at key ports where unnecessary dwell or demurrage and detention fees accumulated can be a good indicator of increased disruption at those locations.

Comprehensive end-to-end visibility

Having a comprehensive end-to-end visibility solution for your ocean shipments can allow you to have visibility down to the PO or SKU level of your freight. Not only do modern end-to-end visibility solutions, like FourKites’ Dynamic Ocean, allow you to go beyond port-to-port tracking to the full multimodal journey, but they also allow you to get predictive ETAs at your fingertips to know exactly where your ocean freight is in real time.

Ocean Exception Management

One key area of managing ocean disruptions is exception management. With a comprehensive ocean visibility solution, shippers are able to see what containers are (or will be) delayed and prioritize accordingly to reduce the impact of delays to customer satisfaction and transportation costs.

Optimize your supply chain network

Another area to mitigate disruptions is to optimize your supply chain network. By analyzing the historical performance of your key carriers, lanes or ports within your network, shippers can pinpoint bottlenecks or areas with regular disruptions. Shippers can also identify carriers or ports that tend to accumulate demurrage and detention fees to reduce the impact of their bottom line. By identifying these bottlenecks, shippers can choose alternatives to limit disruptions and optimize their supply chain.

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