Supply Chain Bottleneck
There's No Place for Everything
With the COVID-19 pandemic sweeping across the globe, businesses and governments are making massive shifts in policy and procedure, helping to stem the spread of this deadly disease. In an effort to “flatten the curve” of the pandemic’s spread throughout its population, nations across the globe have enacted on and off shelter-in-place orders and closures of “non-essential” retailers.
Businesses and stores were closed and workers were being told to stay home to prevent the spread of the coronavirus. This has led to severe issues for the global economy with some industries seeing harsher impacts than others. The shipping industry finds itself in a particularly difficult place due to the complexity of modern supply chains and the problem of bottlenecking.
The rise of globalization of trade over the past few decades has brought us to a point where the complexity of our supply chains is at an all-time high. Every industry operates on razor-thin margins that rely on multiple businesses, governing bodies, and countries to bring a product from its raw form to a market-ready state.
Supply chains rely on each link within the chain to remain operational at or near capacity, ensuring the timely delivery of goods across the globe. Unfortunately, this means an issue with a single link can result in the entire chain breaking down. One of the supply chain links most at risk from the implementation of COVID-19-spread prevention policies is storage.
What Happens When Storage Space Runs Out
Due to the mass closure of non-essential businesses and warehouse staff shortages, many goods routed for closed stores were left sitting at ports and inside warehouses with no one to retrieve them. This increase in products sitting on shelves and pallets has grown into a massive bottleneck for the global trade supply chain as storage space runs out. As ports reach capacity, new shipments have nowhere to go and essential and non-essential products alike have been stuck waiting to be unloaded.
The World Shipping Council (WSC) released a statement speaking to the dire need for national and local governments to “support policies that ensure that the flow of cargo through the world’s ports remains fluid.” The WSC statement also mentions that many shipping companies are chipping in to help keep cargo flowing by offering extended transit times and storage in transit.
The International Federation of Freight Forwarders Association (FIATA) also released a statement urging shipping lines to “exercise restraint in their demurrage and detention charges and practices, taking into consideration the unprecedented difficulties faced by the freight forwarding industry and other stakeholders amid disruptions to the supply chain.” Trade bodies and industry leaders are working together to maintain the fluidity of the global supply chain during these trying times.
Contact us today and see how one of our logistics experts can help you steer through these difficult times.