In the last few months, exports from the UK to North America have become increasingly volatile. The combination of equipment shortages, port congestion, and other issues have led to a perfect storm of complications. Shippers are facing delays, escalating freight rates, and increases in peak season surcharges. Understanding the challenges at hand and how to overcome them is essential for a successful supply chain.
This article will showcase the issues exporters are facing when shipping from the UK to North America. Then, we'll demonstrate some strategies your business can utilise to help overcome these issues.
Difficulties Facing Exports From the UK to North America
The global pandemic has led to an incredible increase in demand for goods. At the same time, it's led to container port shutdowns, increased labour shortages, and a myriad of other issues. In both the UK and North America, problems have arisen that have made shipping increasingly challenging. Here are just some of the ongoing issues that have lead to the current situation:
Port Congestion at USA Port
The Los Angeles port in the USA has been struggling to meet demand. Gene Seroka, CEO of Los Angeles port, has noted that terminals are already operating at 105-107% capacity. As businesses prepare for the holidays in the coming months, a rising number of ships are expected to head to the port. Operators are working hard to ensure they can handle the onslaught and increase capacity. Yet, many clients are sceptical that this effort can halt significant delays and increased costs.
HGV Driver Shortage in the UK
The severe shortage of Heavy Goods Vehicle (HGV) drivers in the UK has made it difficult for shippers to plan supply routes. A combination of COVID-19, Brexit, poor wages, and low-quality working conditions has led to a steep decrease in total lorry drivers. Without proper planning, it's expected that finding available lorries will be difficult.
Lack of Equipment and Labour shortages in the USA
Businesses throughout the USA have had difficulty finding necessary equipment, truck drivers, and warehouse workers. Hauliers and warehouses in the USA have found it increasingly difficult to meet demand without the required labour and tools. Increased costs and delays are expected across the entire supply chain as companies scramble to solve the problem.
Severe Rail Congestion in the USA
Rail terminals are currently facing too much demand and facing congestion as bottlenecks are created. As truck shipments face tight capacity and increasing rates, companies have moved to make shipments via rail. But, terminals were not prepared to meet demand, which was compounded by the lack of truckers to pick up the containers.
How Will This Affect my Supply Chain?
Delays and increased costs are expected across the board. To meet customer demand, many companies have chosen to raise wages to get and keep necessary staff. This increased cost for couriers and warehouses is likely to be passed onto shippers. Businesses are already facing substantially increased charges. With peak season starting, rates are only expected to go up.
The Mediterranean Shipping Company (MSC) has decided to increase its peak season surcharge from Europe to the US by $1,000 per 40 feet. Some haulage companies have passed an extra "Driver Retention Surcharge" of £100 per booking. Additionally, many shippers have reported facing hefty storage charges, with costs at upwards of $10,000 for a single container stored at US rail terminals.
Increased costs of this kind are only expected to become more prevalent. Businesses need to prepare for these increased costs and find ways to navigate the ongoing difficulties.
What can I do to Prepare for These Difficulties?
The current situation is unsustainable. High freight rates have made it difficult for companies to book containers at costs that preserve their expected margins. The volatility is expected to last until around the Chinese New Year of 2022. But, even after that point, it's unlikely costs will go back to where they were before. Adapting to these new realities is fundamental. Here are some of the strategies you can put in place to help protect your logistical supply chain:
Track and Trace Your Goods
By enabling visibility in your supply chain with tracking systems, you can know exactly where your goods are at any given time. This can help you ensure your cargo is shipped quickly and give you real-time updates to help you avoid any complications.
Without investing in visibility, it can be easy to be caught off guard when complications arise. By working with shipping experts like WTA, we can offer you real-time tracking of your inventory. Additionally, we can provide professional expertise when problems arise. Not only will you be provided with enhanced technological expertise, business intelligence and digital solutions, but we also have an experienced hands-on team of logistic experts.
Plan your Shipments in Advance
Booking shipments in advance can have several substantial benefits. By leveraging early booking, you can save money and make your shipments a priority should any issues arise. This means your goods can arrive at their location as early as possible. Additionally, it can help reduce stress when delays occur as you'll have plenty of time to adapt to any changes that need to be made.
Advanced shipping requires extra planning to ensure your supply chain moves smoothly. By working with experienced shippers like WTA, you can take advantage of the detailed planning to deliver your goods without issue. WTA manages the export and import of a wide variety of goods, working with each client to design processes specific to their needs.
Improve Communication in Your Supply Chain
It's essential to ensure that those responsible for the transport of your goods can communicate effectively. Achieving this can lead to significant efficiency savings in outbound logistics.
Warehouse managers, delivery personnel, and other staff members need to communicate efficiently. This way, issues can be resolved before they become serious. At WTA, we have integrated with client, supplier and agent systems. We work to create a seamless and dependable logistics experience.
Exporting from the UK to North America has become difficult. The increase in demand from COVID-19 has led to terminal congestion and higher shipping costs. Learning how to navigate these increased costs and delays is essential for the success of many supply chains.
You can help overcome these challenges by increasing visibility and booking your shipments in advance. Additionally, improving communication in your supply chain can help ease any issues. Adapting to these new realities is vital but challenging for many businesses. Working with shipping experts like WTA can make this easier.
With WTA, you can regain control of your supply chain. We offer online tracking and real-time visibility, allowing for better planning. Together, we can transform the way your logistical supply chain runs. Book a consultation to discuss your needs.
