SEAPORTS IN CRISIS GLOBALLY

What is the current state of the supply chain for publishers bringing freight from overseas printers and suppliers?

In general, the global supply chain is a disaster. The impact this has on the publishing industry is mostly related to four color printing overseas; the extraordinarily high cost of transportation, lack of capacity, and delays.

We have seen prices for 40’ full container loads out of Asia increase 10,000 USD per container and more, in order to secure space. Pricing out of Europe has almost quadrupled. Obtaining space out of Korea is nearly impossible.

South Korean Line HMM had the highest level of blanked (cancelled) port of calls, omitting more ports than it is calling at. Maersk and MSC have a weekly blank sailing average of 45%, with the lowest overall performance for any of the major steamship line alliances.

Blank sailings reduce the number of containers that shippers want to ship out from affected ports. They also have a greater effect on lower paying shippers, with the lines favoring cargo from higher paying customers. This is driving up the shipping prices further as competition increases for limited space on the ships.

In addition, the increase in “Covid-spending” has put more demand on the supply chain at a time when the entire infrastructure (shipping, rail, trucking) was already weak, and then even more jeopardized by Covid. Trucking in the U.S. and other countries is at a breaking point. Truckers are quitting under the weight of the overall pressure of the state of the supply chain and we have a shortage of drivers.

How much impact did the stranded super-container ship in the Suez Canal have on global freight?

The vessel blockage of the Suez Canal, a major lane for global trade, created a ripple effect to all shipping lanes. This disrupted vessel rotations. Hundreds of vessels diverted around the Cape of Good Hope to avoid the line for the Canal. These thousands of vessels required revised port of call schedules. It is important to consider that this trickled down to customs officials, dockside labor, and the availability of trucks and chassis for thousands of arriving containers.

Already congested ports have to deal with stacks of outbound containers taking up valuable space at and around the ports. Cargo owners desperate to avoid delays have turned urgent orders to air freight causing high demand at a time when Covid has many airline fleets grounded.

Ocean import volume to the USA through April, year over, increased by 42%. The port of Los Angeles is overwhelmed. Inland port points of Chicago and Memphis are extremely bad. There are containers that are grounded and in stacks, which are subject to storage charges. The lines are forcing forwarders to pay when they cannot have the containers available to us for as long as three weeks.

On May 25th, Yantian, one of China’s busiest ports, suspended its export operations due to congestion and a recent outbreak of Covid that resulting in a labor shortage. This closure remained in place until the 27th of May. Vessel schedules out of Shenzhen were affected by this disruption, which will compound the current issues on the Asia trade route.

What advice do you have for publishers as they navigate the supply chain crisis?

Specific to off-shore production, we have suggested to our clients that they diversify between two continents and spread the risk of delays. While pricing out of Europe to the U.S. is high, the transits are better than Asia at this time, including the delays. India’s infrastructure, combined with Covid and the recent typhoon, have made that origin very difficult in regards to overall transit times. Stock (goods) transfers from the U.S. to the UK are also impacted as the lines are blanking (cancelling) sailings, capacity issues, and generally longer transits.

In sum, pricing, space, and schedule reliability are all issues that we anticipate continuing for the foreseeable future. Because of this crisis it is hard to guide our publisher clients as to lead times to make on sale dates, and we have suggested double the normal lead time, in general.

This is a good time to review your shipping terms. Meadows Wye is happy to review different international commercial terms and outline the benefits of FOB. As the world is in a global shipping crisis, Meadows Wye can share our experience in freight costs and transit times from alternate print sourcing regions. We offer ECPA member discounts for customs brokerage as well as free consultation on preproduction. Contact Susie Scally (susies@meadowswye.com or call 718-983-9700) for a free consultation on shipping and U.S. customs brokerage.
 

 - Susie Scally, Director of International Sales

 

 
 

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