Shippers Rethink Freight Strategies Amid West Coast Port Backlogs

Navigating Unpredictable Seas: Shippers Rethink Freight Strategies Amid West Coast Port Backlogs

The smooth flow of global trade relies on the intricate dance of logistics, an art that often lies obscured beneath the consumer's experience. When this choreography falls out of sync, as has been the case most recently at West Coast ports due to labor disputes, the ripples can be felt far and wide. These backlogs, as reported by the Journal of Commerce, spotlight an urgent need for shippers to reevaluate their strategies. 

Backlogs at West Coast ports have been a recurring concern for shippers, with the frequency of such events underscoring an uncomfortable reality - having all their eggs in one basket may not be the most resilient strategy. Repeated disruptions, whether due to pandemic disruptions, driver and container shortages, or labor disputes, have progressively eroded the perception of reliability of West Coast ports, leading to significant delays and financial losses. 

While the West Coast ports have historically been the gateway of choice for many shippers, particularly those moving goods from Asia, the rising frequency of these backlogs has necessitated a hard look at the available alternatives. On the other side of the country, East Coast ports have been ramping up their capacities, making significant improvements to accommodate larger vessels and enhance their intermodal rail capacities. These investments present a potential alternative for shippers and particularly their freight forwarders who are weary of the chronic volatility of the West Coast ports. 

However, the shift from the familiarity of West Coast ports to their East Coast counterparts is not a decision to be taken lightly. A recently conducted global survey by Fluent Cargo, the Australian route planning software provider, in April 2023 on route planning and research practices in the logistics industry offers crucial insights into the challenges involved in such a transition. The survey, which gathered responses from a diverse range of stakeholders including freight forwarders, beneficial cargo owners, third-party logistics service providers, and carriers, revealed the significant effort and time that goes into the planning and research of freight routes. 

The complexities of route planning are particularly daunting for international shipments. The survey reported that 47% of respondents found international shipping to be a key concern. Adding to the complexity is the unfamiliarity with East Coast routes - 65% of respondents stated that shipping to unfamiliar destinations was their most time-consuming task. 

The type of cargo being shipped adds further complexity. The handling of hazardous goods requires a high level of expertise and understanding of specific regulations. According to the survey, 52% of respondents sought help online for managing such shipments, a number that's likely to increase if more shippers start considering unfamiliar routes and ports. While different complexities are experienced for the shipment of perishable goods, for example. 

Andy Greig, CTO of Fluent Cargo, emphasizes that while their platform simplifies the process, the ultimate decision-making responsibility remains with the shippers. “Technology aims to provide shippers with the right information and tools to make informed decisions, the broader context of geopolitics, labor relations, and infrastructural developments is equally crucial. Shippers must be prepared to adapt and diversify their strategies in response to these evolving dynamics," says Greig. 

For smaller players in the e-commerce sector, these disruptions can be even more daunting. Without the resources of larger corporations, these businesses must be particularly savvy and proactive in their freight planning. Shifting towards new transit routes and modes of transportation may offer potential benefits, but these businesses must be prepared to invest time and resources in understanding new routes, schedules, and handling capacities.  

The seemingly never ending backlogs at West Coast ports underscore a significant vulnerability in the global logistics sector - a concentrated reliance on certain gateways. As a response, shippers, particularly in the e-commerce sector, must adapt and diversify. This adaptation calls for a delicate balancing act - leveraging technological tools to simplify the planning process, while also keeping a keen eye on the ever-evolving dynamics of global trade. The high seas of global logistics are unpredictable, but with the right tools and strategies, shippers can navigate these waters with confidence and resilience.