Coping With Blank Sailings, Surcharges & Spikes
From its position as a global third-party logistics provider, SEKO has unique insight into air and ocean trends. For one, global restocking is lowering the odds of a slack season in 2021, says Brian Bourke, the company's chief growth officer. In a media call, SEKO execs shared their perspective on the following challenges facing manufacturers and shippers:
Blank sailings in China. Only 42 blank sailings were announced for Chinese New Year because ships have been sitting in the United States and Europe due to congestion. Another 21 sailings will be blanked in 2021, but that number is significantly lower than in 2020, says Akhil Nair, vice president of global carrier management and ocean strategy. Things could get worse before they get better in China unless congestion abates, he says.
Volume in the United States. Volumes have escalated since June 2020. COVID-19 impacted labor and caused vessel berth delays. On the East Coast, 60 or so vessels are stacking up in the ports, creating equipment shortage issues, says Kevin Krause, vice president of ocean services.
Surcharges. In July, companies started offering guaranteed load premiums just to get container space. Those premiums are $1,700 to $4,000, which has effectively become the market rate, says Chris Capodanno, vice president of product development.
Air freight demand. Demand has increased month over month, especially in e-commerce, and it's not slowing anytime soon, says Shawn Richard, vice president of global airfreight. Capacity is continually a challenge. Many airlines executed freighter conversions, which helped ease delays. Until passengers start booking flights, carrying freight provides air carriers with an influx of cash that keeps them going, Richard says.
E-commerce spikes. As e-commerce continues to surge, SEKO is "operating 8 days a week, 36 hours a day," says Rick Lee, chief operating officer, but everyone is vying for the same labor and dealing with constraints. SEKO is looking into robotics and automation, he says, to keep up with demand.