On Monday, March 19, 2018, two Hapag Lloyd ships collided while berthing at the port terminal in Karachi, Pakistan. The stunning video of massive containers tumbling into the sea is a reminder of how quickly large and complex port operations can go awry.
All cargo ports experience collisions, and some may also see fires, explosions, equipment failures, labor disputes, and even acts of sabotage and terrorism. Any of these extreme circumstances might interrupt the flow of your freight.
While importers-exporters and freight forwarders cannot control these types of events, they can take other steps to avoid more minor delays at departure and destination ports.
Some problems are simply out of your control, but it’s important to be aware of what could happen when you ship cargo between ports via ocean freight. While major incidents rarely plague ports, many issues can delay your cargo —and any delay is a bad delay. Learn about port problems and what you can do to prevent delays whenever possible.
Ocean Freight Holdup #1: Poor connection infrastructure
Even if a port operates in a modern and efficient manner, your cargo may still experience delays caused by inefficient rail lines or truck routes to bring material to and away from ocean freight carriers. Indeed, ports themselves may lack proper efficiencies to meet demand.
In 2015, many Asian ports experienced extreme congestion caused by a lack of port capacity and surrounding infrastructure. Freight forwarders understand that getting cargo transported via ocean freight is only part of the battle — sometimes getting it out of and into port can be the real challenge.
Holdup #2: Labor difficulties
Disputes and workers strikes are not uncommon among union dockworkers, and the impact of lost productivity can be devastating for companies whose cargo can’t move through. From September 2014 to February 2015, U.S. West Coast ports experienced massive delays when workers there went on strike. During the nine-month standoff between the Pacific Maritime Association and the International Longshore and Warehouse Union, port productivity at some terminals fell by 73%.
As vessels waited weeks to berth, entire supply chains were held up. The Washington Council on International Trade estimated that total losses from the strike to Washington businesses alone were $770 million.
Reason #3: Vessel owner decisions
Operating an ocean freight fleet is obviously an incredibly expensive and challenging enterprise. For this reason, many carrier corporations now partner with competitors to share ocean freight space, increasing both entities’ capacity utilization. Additionally, vessels have grown dramatically in size over the past several decades.
These two changes are adjustments carriers have made to protect their business interests. The result for IEs and freight forwarders is that your cargo is batched with other shipments involving layers of competing interests. Everyone wants to be first, but the whole operation runs more slowly as ocean freight is sorted.
Ocean Freight Holdup #4: Documentation difficulties
While you cannot control a vast number of complicating factors at ocean freight ports, documentation is one major aspect you can positively affect. If your company fails to file the proper customs documents, files them incorrectly, or doesn’t keep a reliable record of tariff and duty payments, your ocean freight might get “rolled.”
This means your freight is going to sit right where it’s at while the document snafu gets resolved. You’ll likely incur storage fees from your carrier vessel and you risk delaying or losing business deals. Be sure all ocean freight customs documents are properly completed and, ideally, store them electronically for an organized, easily accessible record.
Keep up with industry developments
Crossing vast seas to ports halfway across the world, the international ocean freight enterprise is far larger than any one company. However, following news about international ports and ocean freight shipping can benefit your logistics planning. Publications like World Maritime News can help you keep up with current events, while industry organizations such as the World Shipping Council offer long-term perspectives on issues.