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SAVE up to $150 on the ASCM CONNECT Annual Conference by registering before midnight CST, August 15!

ASCM Insights

In Early August, Holiday Shipping Is Already Suspect

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The logistics outlook for the 2022 holiday season is shaping up to be at least as challenging as last year’s. Our global networks continue to face a series of bottlenecks, with each weakened link in the supply chain affecting the next partner’s ability to deliver.

The cargo pileups persist at the Port of Los Angeles, a key point for international goods entering the United States. The port director there says about 35,000 containers await shipment by rail, compared with the usual 9,000. At the Port of Oakland, wait times have climbed to 26.5 days.

And these challenges on the U.S. West Coast are sending ripple effects eastward. East Coast ports are also seeing a huge uptick in shipments, with the Port of Savannah handling its greatest amount of ad hoc and new service vessels ever. Average wait times are up 123% compared with last quarter.

Transportation Analyst Ben Nolan of Stifel Financial Corp. says the problem actually stems from a worker shortage on the railroad lines that’s impeding the movement of cargo out of ports. With railroads losing 20% of their workforces over the past three years, it’s much more difficult to decipher supply chain puzzles. Things could get even worse if rail workers strike. According to CNN Business, the clock is ticking toward a possible work stoppage in less than 60 days.

Certainly, there are also problems beyond the railroad. The truck driver shortage continues; plus, drivers are running out of places to put their cargo as warehouses are stuffed with imports waiting to be picked up. There are a variety of international pressures, as well. Recent COVID-19 lockdowns in China restricted progress. The war in Ukraine and inflation have diminished container demand. Total container volume from China to the United States is expected to fall alongside a drop in consumer spending, but the existing supply chain bottlenecks will make it tough to increase container availability.

Of course, labor uncertainty is not just a U.S. problem. Port labor strikes and rail disruptions in Europe have left German ports congested and further limited container availability. Similar effects are beginning to appear in the United Kingdom.

The bottom line is this: With no clear end to the problems in sight, we’re unfortunately on track for another complicated holiday shipping season. “Global shippers should be prepared for volatility in the coming quarters,” Chief Shipping Analyst Peter Sand of Xeneta told CNBC. “Patience is required.”

Studying better solutions

These past few years have been quite an education for those of us in supply chain. As challenges mount, supply chain professionals are actively searching for and implementing solutions to meet customer expectations. It’s clear we still have a ways to go, but the answers are out there. To find them, we must keep learning.

The ASCM CONNECT Annual Conference educational lineup is all about enabling supply chain professionals to address end-to-end supply chain challenges. In particular, the Dynamic Fulfillment learning pillar will investigate the movement of goods throughout the supply chain, providing key insights into optimized logistics, transportation and distribution; streamlined warehousing; and smarter scheduling, picking, packing, and shipping. Along this pillar, don’t miss the presentations Elevate Freight Activities to Boost Profitability and Sustainability, A View Inside Amazon Logistics, and Creating a Winning 3PL Partnership.

This is just a small sampling of the vast educational opportunities at this year’s event. I hope to see you in Chicago, September 18-20, so we can problem-solve together. Register today.

About the Author

Abe Eshkenazi, CSCP, CPA, CAE CEO, ASCM

Abe Eshkenazi is chief executive officer of the Association for Supply Chain Management (ASCM), the largest organization for supply chain and the global pacesetter of organizational transformation, talent development and supply chain innovation. During his tenure, ASCM has significantly expanded its services to corporations, individuals and communities. Its revenue has more than doubled, and the association successfully completed three mergers in response to both heightened industry awareness and the vast and ongoing global impact driven by supply chains. Previously, Eshkenazi was the managing director of the Operations Consulting Group of American Express Tax and Business Services. He may be contacted at abe@ascm.org.

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