Currently, there are an incredible number of container ships waiting to be unloaded at the Ports of LA and Long Beach. To add to the congestion, there are more ships en route. Since these two ports account for the nation’s largest trans-shipment centers, this provides insight into the trouble we face going forward. The sad truth is that the U.S. doesn’t have the infrastructure to handle the tremendous flow of containers headed for our country. Clearing the backlog could take us into Q3 or Q4 of 2022.
A view of the parcel side is equally dismal. UPS and FedEx have more freight than they know what to do with as we enter Q4 of 2021 and approach the holiday shipping surge. Expect the parcel carriers to utilize and initiate accessorial charges to offset their increased costs. Moreover, expect transit time to suffer.
The LTL and Truckload sectors are having similar issues. In addition to their struggle to find drivers and dock workers, these carriers are unable to obtain enough equipment to service their current volume. Shippers are not releasing trailers fast enough and storage trailers are in extremely high demand which has created a significant trailer shortage. Meanwhile, manufactures of tractors and trailers are having difficulty fulfilling orders for new equipment. COVID shortages are only making this matter worse.
What to expect for 2022? Without question, HIGHER RATES.
How can a shipper combat these dire problems? Focus on internal processes, watch for opportunities to consolidate shipments and work closely with vendors regarding product availability and scheduling.