How the ocean freight crisis is affecting project logistics

However, the ocean freight crisis is not just affecting individual sectors but practically every company during the Covid-19 pandemic. ‘I don’t know how manufacturers can cope with these challenges alone. The situation is one that we’ve never experienced before, even a company like ours, which has many years of experience in project logistics,’ Walch explains.  

While it was primarily container deliveries that were affected at the outset, RoRo and break bulk shipments are now being particularly impacted because of these bottlenecks, as every bit of available shipping space is being used. The situation seems to be most drastic for deliveries from China to Europe and the USA. Ultimately, the project logistics business is not only facing a shortage of shipping space for so-called OOG goods (‘out of gauge’ – i.e. oversize consignments such as heavy cargo items) and the corresponding small parts, which can be placed in containers. The handling capacity at ports is also extremely limited and this often causes clearance delays.

Covid-19 continues to introduce a large number of challenges, even about eighteen months into the pandemic. In the spring of 2020, when the pandemic broke out, many shipping companies were forced to cut important connections for a short time, take vessels out of service and accept fewer new orders. The boom in demand following the first lockdown automatically created bottlenecks, which cannot be handled with the current shipping and container capacity.  

Quarantine measures for ships’ crews and port personnel in connection with the pandemic have also meant that more and more important specialist workers have been unavailable for clearing deliveries. This in turn has created real logjams at the ports and delays in transporting the goods from there – and this is a problem that is very familiar to Walch and his team, too.

A project involving booking a RoRo shipment for a partial consignment from Shanghai in China to Baltimore in the USA during the summer of 2021, for example, proved to be far more complicated than prior to the pandemic. The earliest suggestion for an available vessel for this consignment was in the autumn and the service provider rejected all attempts to arrange an earlier departure, stating that there was ‘no shipping space available’. When the situation in Shanghai then deteriorated even further and shipping companies started to reschedule their departures and completely remove the port from their list of stopping points because of the enormous congestion there, the autumn alternative was no longer an option. A departure would then have been possible at the earliest at the start of 2022 – and it was the same story with other service providers. ‘FCL shipments were not an alternative at this time either as the shipping rates for containers are still continuing to reach new record levels,’ Walch comments. It was therefore necessary to continue looking for a suitable solution. 

Logistics specialists face the same problems as their customers in the crisis. Then there is the fact that it is also necessary to explain situations to customers. ‘If people aren’t aware of the market or don’t have any contact with experts, the current situation can be devastating for an individual company,’ Walch adds.

This is why freight forwarders are doing everything to explain to manufacturers the current changes in the marketplace such as unreliable timetables and capacity problems and prepare them for any eventuality. Project logistics experts and customers then draw up concepts together, which also take into account the current challenges. This may involve significantly more work as more options have to be compared with each other, but it ensures the best possible solutions in the current situation.