In recent years, the global supply chain has seen an unprecedented series of high-profile disruptions. While disruption is nothing new for the global supply chain, the pace at which the industry is now being asked to contend with major disruptions is greater than ever. As a result of climate-change induced weather events, an increasingly hostile geopolitical landscape, and the threat of continued labor action, the supply chain is now facing a perfect storm.
Facing a once-in-a-lifetime combination of operational threats, supply chain leaders are turning to ocean container tracking software as a means of building the visibility, reactivity, and resilience needed to survive a volatile logistics landscape. In this article, we’re breaking down the supply chain’s perfect storm, and investigating how ocean container tracking software acts as an invaluable tool in navigating the turbulent waters of global logistics.
Today’s Logistics Professionals Face a Perfect Storm
Since the onset of the COVID-19 Pandemic, logistics professionals have faced a never-ending series of disruptions. From pandemics to port strikes and beyond, it’s clear that disruption, and the subsequent adaptation efforts, are the defining characteristic of the contemporary supply chain.
These disruptions, however, don’t happen in a silo. Rather, they compound upon one another to create large-scale supply chain issues. When paired with seasonal industry fluctuations in volume, the result is a disruption-ridden supply chain tasked with navigating a dynamic volume landscape: a perfect storm.
In this section, we’re breaking down the three prongs of the perfect storm.
High-Profile Disruptions Lead to Complex Operations
Moreso than any other, two disruptions have come to epitomize recent years in the global supply chain.
- The Drought in the Panama Canal has forced the Canal Authority to strictly limit allowed vessel transits, drastically reducing the amount of cargo able to pass easily between the Atlantic and Pacific Oceans. According to McKinsey, 2024 will see volumes reduced by roughly 30%, forcing shippers to find alternate routes to lucrative trade hubs.
- The Crisis in the Red Sea is impacting trade flows in another, arguably more important, global trade waterway. Since the first Houthi attacks on rebels began in October 2023, many major carriers have chosen to halt operations in the region, leaving shippers to contend with transit time increases of roughly two weeks as vessels transit around the Cape of Good Hope at the southern tip of Africa.
While shippers have largely adapted to these dueling crises, the impact is nonetheless palpable throughout the global trade landscape. Longer transit times in both the Eastern and Western hemispheres have forced many shippers back to the days before the Suez and Panama Canals, forcing them to transit the turbulent waters of the far reaches of the Southern Hemisphere.
However, as with anything in the global supply chain, these disruptions do not exist in a vacuum. As the impacts of high-profile disruptions continue to wreak havoc upon the global supply chain, seasonal volume pressures threaten to compound their impact.
As Slack Season Ends, Pressure Builds on Shippers
As the slack season ends and shippers look to establish effective shipping strategies for peak season, the impact of disruptions becomes increasingly clear. As carriers struggle to adapt to the dueling crises in the Red Sea and the Panama Canal, rates have steadily increased. While the rate increase stemming from the crisis may be starting to abate, shippers are nonetheless facing a brutal contract market this peak season.
According to reporting from CNBC, the current spread between spot rates and the long-term contract market is at its highest since September 2021, equal to approximately $2,500. Ultimately, this reflects a mismatch between buyer and seller expectations within the freight market. While many ocean shippers hope to take advantage of lower spot market rates, which will fall as the impact of the Red Sea crisis abates, carriers hope to sign shippers on to long-term contracts that reflect the current strained freight market.
The Wild Card: East Coast Port Strikes Threaten to Disrupt Peak Season Operations
As shippers contend with pressure from carriers and the ongoing impacts of the disruptions in the Red Sea and Panama Canal, there’s another potential disruption that may upend the transportation industry in the midst of peak season. The current contract between the International Longshoremen’s Association, or ILA, and the Maritime Alliance, a group of carriers and port operators, is set to expire on October 31, 2024. As this date approaches, negotiations between the two parties are growing increasingly contentious, with union leadership jockeying for gains that go beyond even those made by the ILWU in recent West Coast port negotiations.
Following a November warning from union leadership to the 45,000 ILA rank and file to prepare for a potential strike, shippers are beginning to prepare for a strike on the East Coast, Gulf Coast, and in the Great Lakes. “If foreign-owned companies like Maersk and MSC try to replace our jobs with automation,” ILA President Daggett said in November, according to reporting from FreightWaves, “they are going to get a painful reminder that longshore workers brought these companies to where they are today.”
While a strike is not yet inevitable, a peak season strike of the ILU’s 45,000 rank and file members nonetheless has the potential to greatly upset supply chains already impacted by disruptions, leaving shippers still more vulnerable to adverse impacts and higher transportation costs.
In a Perfect Storm, Ocean Container Tracking is a Vital Ally
As the global supply chain navigates through a perfect storm of disruptions, the need for advanced tools to enhance visibility, reactivity, and resilience becomes more critical than ever. Ocean container tracking software emerges as a beacon of hope for logistics professionals facing the challenges posed by high-profile disruptions.
Enhanced Port and Terminal Awareness
Ocean container tracking software offers unparalleled visibility into port and terminal operations, allowing shippers to stay informed about key performance indicators (KPIs) such as vessel turnaround times, berth utilization rates, cargo dwell times, and terminal productivity metrics. By tracking these KPIs in real-time, shippers can identify potential bottlenecks and inefficiencies at ports and terminals, enabling them to take proactive measures to mitigate disruptions and optimize their supply chain operations.
Real-Time Visibility for Real-World Supply Chain Crises
Ocean container tracking software provides end-to-end visibility across the entire supply chain, allowing shippers to track the movement of their containers from origin to destination. With real-time tracking capabilities, shippers can monitor the status and location of their containers at every stage of the journey, ensuring that they are always aware of any delays or disruptions that may occur along the way. This level of visibility enables shippers to make timely decisions and take proactive measures to reroute shipments or adjust schedules as needed, minimizing the impact of disruptions on their supply chain operations.
Automated Awareness for Maximum Resilience
Shippers can set up alerts to receive notifications about important events such as rolled cargo, demurrage and detention charges, and last free day (LFD) deadlines. By automating these notifications, shippers can stay ahead of potential issues and take immediate action to address them, preventing costly delays and ensuring smooth operations throughout the supply chain. With its advanced features and capabilities, ocean container tracking software empowers shippers to navigate the challenges of a volatile logistics landscape with confidence and efficiency.
Are You Ready to Navigate the Perfect Storm?
As the logistics industry continues to evolve and face new challenges, the importance of advanced tools like ocean container tracking software cannot be overstated.
By harnessing the power of technology, shippers can navigate the volatile logistics landscape with confidence, resilience, and efficiency, ensuring the seamless flow of goods across the globe.
With ocean container tracking software, shippers are better equipped than ever to weather the storm and emerge stronger on the other side. Are you ready to navigate the perfect storm? Book a demo with OpenTrack today.
