Sea freight market update | Jan-Feb 2021

Sea Freight: Current situation in the USA

The existing bottlenecks in the US ocean freight market, which are lasting for quite some months already, will continue for a longer period. We would like to give you an overview of the current situation.

Port and rail congestion

Already for months, the USA is experiencing historical congestions in sea freight business. The reason for this ongoing situation is well known: COVID-19 impacts and a high volume demand creating bottlenecks at all major ports and terminals throughout the country. Port and rail operators are operating with reduced staff, which delays loading and unloading of vessels, increases dwell time and slows down transportation processes to the terminals. Ocean Carriers are also overwhelmed with the situation and struggle to provide the needed service and timely response. Ocean vessels are having several days of delay and we experience port omissions on a regular basis. Schedule integrity remains almost non-existent.

US trucking situation

Trucking companies suffered heavily at the beginning of COVID-19 and were forced to let go many of their drivers due to the drop of volume and demand. Then, the boom of freight and demand hit the US market and at this point, not enough drivers were available. The driver situation improved over the last months but the current trucking fleet does still not cover the strong demand. Truckers are overbooked for the next 3-5 weeks. To accelerate the pick-ups and deliveries, LTL and FTL can be an option to arrange transloads into/from containers at designated warehouses.

Chassis in the US

It becomes a great challenge that almost all containers are stuck somewhere on chassis, waiting for transport. That leads to the problem that empty chassis are hardly available to arrange a pick up. Chassis are fully used and become a rare commodity in the US.

US inbound freight

The ports and rail terminals infrastructure in the US is simply overwhelmed by the current import volume. Inbound containers are parked on certain spots to make room for the new vessel / train loadings. In many cases, these "parking lots" are completely overstocked and containers are buried and not available for immediate hand over. In order to arrange a pick-up, the terminal provides appointments to truckers ONLY once the container is available and customs released - which can take days and even weeks in many cases.

US outbound freight

The main challenge is to find the desperately needed container equipment as well as the chassis for the transport. Ports and rail terminals are also full of export containers and the stations are not simply accepting export loads that easily. The situation is tight and almost every shipment is experiencing severe delays.

Outlook

We estimate that the situation in the US will not improve this year. Even 2022 will continue to be challenging but the team of DACHSER is aiming to provide our clients a good service and solutions despite the challenging times in the USA.

High Priority Cargo

Currently, it is possible to achieve better transit times and shorter turnaround times at the US terminals by using LCL services for prioritized shipments instead of FCL services. DACHSER operates regular premium LCL services on both ex-Asia and Europe trade lanes. Transit times ex China, for example, are even shortened from overall 28 to 18 days. And further, new pipeline services including Atlanta and Los Angeles aim to reduce booking windows immensely. The continuing tight situation in the US ocean freight market will also require that desperately needed freight will have to be loaded more often by air. DACHSER offers regular premium capacity with its own Air Network, for example with weekly connections on the Frankfurt - Chicago route in both directions and the option of connecting to other US airports.

We are in close contact with carriers and service providers on a daily basis and do our best to make your supply chain as smooth as possible. For individual advice, please contact your local representative of DACHSER so that we can implement the best logistics solution for you.

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Golden Week 2024 in China

From October 1 to 7, most businesses and factories in China will be closed for the National Day Golden Week holiday. As one of the world’s most important economies, this extended shutdown can significantly impact the international supply chain. It’s important to start preparing now to minimize potential disruptions.

Golden Week is a 7-day national holiday in China that celebrates the establishment of the People’s Republic of China on October 1. The holiday lasts from October 1 to October 7, during which many Chinese people travel for leisure or visit family across the country. Like many other businesses, DACHSER in China will be closed during Golden Week and will resume normal operations on  October 8.

Most businesses and factories will be closed during the week-long holiday, meaning that production will be at halt. Airports and seaports will keep operating but with reduced manpower due to low production volume from factories. Normally government institutions such as customs offices will be closed from October 1 to 3.

Since China, one of the world’s biggest economies and production countries, will come to a standstill for a whole week and factories may not run at full capacity as soon as the official holiday ends, the plunge of production volume would have an impact to the worldwide supply chain.

To help reduce potential interruptions to your supply chain during Golden Week, consider the following steps:

• Communicate with your suppliers and customers to make arrangements for sufficient stock and manage expectations
• Discuss your planning with us and prepare an accurate shipment forecast for long-term planning, so we can offer you the most suitable solution that fits your budget and schedule
• Place your booking earlier and pay attention to the cut-off dates.
• For sea freight, it is recommended to book 4-6 weeks before the start of holiday
• For air freight, it is recommended to book 1-2 weeks before the start of holiday

If you have any questions, please get in touch with your usual local DACHSER contact who will be happy to assist and plan the next steps with you together.