The combination of reduced worldwide capacity due to COVID-19 in Q2, followed by the current surge of volume, has led to an extremely heavy Peak Season. While space for Air and Ocean bookings remains an issue, all ports are experiencing severe congestion, causing a domino effect throughout the industry. Regarding Ocean Freight, container delays, wait times, equipment shortages, and terminal yard closures are creating a drastic impact. Air, LCL, and FCL shipment delays continue to be seen at each leg of the process. Domestic Carriers, including FedEx and UPS, are beyond capacity, disrupting at an unprecedented level for this time of year. To further highlight the historic volumes, below is a graph illustrating the year over year increase in Asian Imports to the U.S.
At present, we do not foresee the situation getting better before it gets worse. Rest assured, our teams are on high alert and fighting each day for solutions to keep our client’s and partner’s best interests protected. We will continue to combat the arising issues, looking for alternative solutions to minimize the disruptions as best we can.
There will be several effects that we all must prepare for, namely, delays and rising costs. Creating any buffer you can for new shipments in terms of lead time will serve as the best means to leaving all available options accessible. Preparing your end customers for potential delays may also be an avenue you chose to explore.
While we will be fighting for all possible solutions to keep rising costs down, you must prepare for the potential for additional charges to apply. Freight costs will undoubtedly increase due to space issues. We expect surcharges to be in place through November at a minimum. Congestion costs are already here in Los Angeles and are expected throughout the country. Pick Up and Delivery delays are already happening due to overcapacity across the country from owner-operators to FedEx/UPS. Pick Up and Delivery service costs are rising daily and will likely continue to increase through Peak Season.
We aim not to paint a dire picture; instead, we want to be forward about the pertinent industry issues that will directly affect you, our clients, and partners. You can count on us to have your best interests as our leading priority while we fight for the best options available. Please do not hesitate to reach out with any questions or concerns about active or upcoming shipments. Collectively, our teams will continue to keep you updated. We are here to serve you.
