Transportation delays: The global shipping crisis explained

In the years after the COVID-19 pandemic began, the world faced a transportation crisis.

Transportation delays  became more common, and the situation only worsened. There were many reasons for this, but two of the biggest factors were China and the United States.

These two countries controlled the flow of the global container fleet, and they continued to face major problems. This has had a devastating effect on the transportation industry worldwide and the exporting and importing of goods.

The impact of COVID

The first reason for the transportation delays during the shipping crisis was that China, the world's largest exporter, had been hit hard by the global pandemic, which began in 2020. 

Two years later, Shanghai remained under lockdown, impacting suppliers, shippers and importers. 

It all began when countries implemented lockdown measures in an attempt to contain the spread of COVID-19, which led to a halt in production and many factories closed temporarily. This caused a large number of containers to be stopped at ports, disrupting the flow of movement. As a result, carriers reduced the number of vessels out at sea to stabilize costs and the erosion of ocean rates, putting the brakes on import and export. It also meant empty containers weren’t picked up. 

This was especially significant for China, which controlled the majority of the world’s containers, because Asian traders couldn't retrieve empty containers from North America. Ports all over the world were congested as idle vessels sat in a backlog or traffic jam awaiting berth. 

Other factors that created challenges include: 

• Blank sailings
• Equipment imbalances
• Increased fuel costs
• Port omissions
• Severe congestion
• Altered vessel schedules

The impact of increased import volumes

The second reason for the delays is that the USA, the world's largest importer, had also been facing significant problems related to shipping delays in China.

U.S. importers were scrambling to find replacement suppliers for goods outside of China, but this wasn’t easy. At the same time, they were also dealing with increasing import volumes because many U.S. consumers were continuing to buy more online - a new habit picked up during the pandemic.

This led to overcrowding at U.S. ports and added to the ongoing haulage shortage. Import volumes were still at record levels in the U.S. with another monthly record. 

Volumes in March 2022 were up 11% from February 2022 to almost 2.6 million TEUs. While reports showed high import volumes in March, there was an overall decrease in port delays, which helped ease congestion. 

But as long as volumes remained above 2.4M TEUs, issues with congestion at ports would continue until changes were made to the infrastructure. A report from the Biden administration recommended further investment in the inland waterway system to help ease congestion caused by persistent ship backlogs at U.S. ports.

Transportation delays due to container and vessel shortages

Many businesses worldwide were struggling with container shortages after the global pandemic created a North American bottleneck. When countries implemented lockdowns, many factories closed temporarily, which caused many containers to be stopped at ports.

In response, carriers reduced the number of vessels out at sea to stabilise costs and the erosion of ocean rates. Ports were also locked down, forcing carriers to omit them. 

Carriers would then have to discharge containers at alternate locations, disrupting schedules and impacting reliability.

A February 2022 report showed new container prices had fallen to $3,400 per TEU due partly to the high volume of containers produced through 2021, which eased some of the shortage. While pricing decreased, it was still above the pre-COVID high of $3,000 per TEU. 

However, the price of used containers in the resale market remained high due to continued demand and decreasing availability. As congestion started clearing and more boxes were released into service, older containers ould be available for resale at a lower cost. But that hadn’t happened yet.

In the meantime, industry experts didn’t see an end to port congestion anytime soon. The problem couldn’t be solved by simply adding more capacity in regards to ships and containers, inland logistics and infrastructure needed investment too..

A port is only as good as the transportation network that feeds it. The Port of Los Angeles — the busiest seaport in the Western Hemisphere —  faced severe congestion. But the port reported its best first quarter ever, tracking 3.5% above last year's record.

Three months into 2022, overall cargo volume reached 2,682,034 TEUs. This was attributed to improved fluidity on its docks and fewer vessels waiting to enter the port.

What was the biggest effect of transportation delays?

The biggest effect of transportation delays was its impact on global trade.

The world economy relies on the flow of goods and services, and when that flow is disrupted, it can have a major impact. We already saw this happen as businesses struggled to get the supplies they need.

This led to further inflation as prices for goods increased. Transportation delays have also led to shortages of certain products.

If businesses couldn’t get the supplies they needed, customers would be left with empty shelves, leading them to turn to other businesses that could provide the products they need. 

How to minimise the impact of transportation delays

The global shipping crisis is out of the control of even ocean carriers, who are at the mercy of container availability and congestion. 

While it may not be possible to completely avoid transportation delays, there are some things that you can do to minimise the impact: 

• Mitigate risks with marine cargo insurance. This will provide peace of mind and financial protection in the event of loss or damage.
• Diversify your supply chain. For urgent orders, consider alternative transport modes such as intermodal freight solutions, rail from Europe to Asia or airfreight for urgent orders.
• Keep track of your inventory levels and adjust your orders accordingly. This will help you avoid running out of stock and dealing with even more delays.
• Stay in communication with your suppliers and customers. This will help you manage expectations and keep everyone up to date on the latest developments.
  

How Hillebrand Gori can help

Hillebrand Gori has the experience and capability to provide you with end-to-end logistics solutions to help overcome transportation delays. 

With vessels being stuck waiting to berth — sometimes up to 14 days, it’s important to factor this in when planning your shipments.

When delays occur at ports with fluctuating temperatures from day to night, we can help protect your wines and beers by using insulation liners that reduce fluctuations caused by temperature shifts.

We have temperature-controlled warehouses where you can store and consolidate your products safely.

Transportation delays can have a serious impact on your business, but there are things that you can do to minimise the damage. Stay informed, be proactive in your planning and you'll be able to weather this storm.

Published 22nd April 2022, updated 10th May 2024

Reviewed by Hillebrand Gori