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UPS Supply Chain Solutions®

Sailing Through Shifting Tides

With conditions and ocean freight rates constantly changing and delays ever-present, shipping freight can be frustrating and stressful. In today’s turbulent times due to COVID-19 and related containment efforts, backlogs and congestion have become worn stitches in the fabric of our supply chains. And sometimes it can feel like your business will never recover.

But the situation isn’t hopeless. With proper planning and an open mind, it is possible to keep your business moving forward. Here are three tactics to help you navigate the turbulent waters of ocean freight shipping.

1. Plan Ahead

One obvious way to deal with current shipping conditions is to plan for longer transit times. Booking at least four weeks in advance can give you a wider variety of options and increases the likelihood that you will find available space on your desired mode. When possible, baking in two or three additional weeks to allow for port delays and other setbacks helps to make sure that even if your shipment is held back, it may still arrive when (or even sooner than) you need it to.

Industry experts encourage businesses to take a holistic look at their supply chain, and to seek optimization every step of the way. Awareness of logistics challenges now includes everyone from your corporate leaders down to your people on the ground, your vendors, your suppliers, and your third-party service providers. “Look further upstream,” recommends UPS Vice President for Ocean Freight, Steve McMichael, “Maybe your supplier’s supply chain might have some challenges.” Once you are made aware of those potential setbacks and delays, you can create a production and shipping calendar several months or even a year in advance and distribute it to all parties to make sure that everyone is on the same page and that issues are identified and addressed early on.

2. Have a Contingency Plan

Ocean freight shipments can be delayed by unexpected circumstances that result in blank sailings, rolled cargo, backlogs in terminals and railyards or even worse - damages or loss, so it’s important to have a plan for fast resolution of any potential issues. Shippers should consider maintaining higher levels of safety stocks so that delayed or lost goods can be replaced more quickly and easily.

“You’re gonna have to take some risks.”

– Romaine Seguin, President, UPS Global Freight Forwarding

Going against historical norms, importers should evaluate shipping smaller volumes of freight more often (i.e. less-than-container load or LCL shipping). Since LCL shipments move using “consistent” schedules, these modes may offer capacity with fewer challenges related to securing bookings or rolling containers. It is critical to note that these alternate service options also encounter unexpected delays that must be factored into your routing decisions.

Another set of options involves choosing alternate lanes or transloading ocean containers into over-the-road trucking. Both can combat potential delays that arise from specific terminal closures or from intermodal rail shipments and may even help secure space on lanes that are more difficult to book these days (for example, China to many locations in the Midwest).

The level of congestion is so severe that McMichael recommends customers take an additional step and prioritize or split purchase orders to ensure that the most urgent items ship first. To develop a comprehensive plan, you should also consider dynamic routing and be flexible with shipping options. For example, if 40ft shipping containers are in short supply, can you split your goods into two 20ft containers to avoid having to wait for a larger container to become available?

3. Adapt and Stay Flexible

Above all things, agility and flexibility are key. Romaine Seguin, President, UPS Global Freight Forwarding, emphasizes the importance of weighing your options and embracing change and experimentation. “You’re gonna have to take some risks,” explains Seguin. “If there is something out there, are you willing to try it? And is your organization going to back you if you do it?

Be willing to consider alternate shipping options. If you refigure your budget, could you perhaps secure space on one of a variety of available “fast boat” or premium shipping options (cost depends on specific options selected)? Depending on your route and destination, you might also consider rail or air shipping. The ideal solution likely involves a combination of modes and routes to move your shipment smoothly from port to port.

One thing is certain: the evolution in shipping that began at the start of 2020 continues to this day, and some of this disruption has led to serious issues in the supply chain industry. Planning and developing action plans to address disruption, and a willingness to experiment with new ideas and modes can help your business adapt in the new world of ocean freight.

To hear more from Romaine, Steve, and other industry exports about their vision for the future of supply chain, check out our Supply Chain Virtual Connect sessions.

Did you know that you can get and compare ocean and air quotes, book your shipments, and keep track of your documents and details online from one central dashboard? Visit the UPS® Forwarding Hub platform now to find out how.

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