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SEAPORTS IN
CRISIS GLOBALLY
What is the current state of
the supply chain for publishers
bringing freight from overseas
printers and suppliers?
In general, the global supply
chain is a disaster. The impact
this has on the publishing
industry is mostly related to
four color printing overseas;
the extraordinarily high cost of
transportation, lack of
capacity, and delays.
We have seen prices for 40’ full
container loads out of Asia
increase 10,000 USD per
container and more, in order to
secure space. Pricing out of
Europe has almost quadrupled.
Obtaining space out of Korea is
nearly impossible.
South Korean Line HMM had the
highest level of blanked
(cancelled) port of calls,
omitting more ports than it is
calling at. Maersk and MSC have
a weekly blank sailing average
of 45%, with the lowest overall
performance for any of the major
steamship line alliances.
Blank sailings reduce the number
of containers that shippers want
to ship out from affected ports.
They also have a greater effect
on lower paying shippers, with
the lines favoring cargo from
higher paying customers. This is
driving up the shipping prices
further as competition increases
for limited space on the ships.
In addition, the increase in
“Covid-spending” has put more
demand on the supply chain at a
time when the entire
infrastructure (shipping, rail,
trucking) was already weak, and
then even more jeopardized by
Covid. Trucking in the U.S. and
other countries is at a breaking
point. Truckers are quitting
under the weight of the overall
pressure of the state of the
supply chain and we have a
shortage of drivers.
How much impact did the
stranded super-container ship in
the Suez Canal have on global
freight?
The vessel blockage of the Suez
Canal, a major lane for global
trade, created a ripple effect
to all shipping lanes. This
disrupted vessel rotations.
Hundreds of vessels diverted
around the Cape of Good Hope to
avoid the line for the Canal.
These thousands of vessels
required revised port of call
schedules. It is important to
consider that this trickled down
to customs officials, dockside
labor, and the availability of
trucks and chassis for thousands
of arriving containers.
Already congested ports have to
deal with stacks of outbound
containers taking up valuable
space at and around the ports.
Cargo owners desperate to avoid
delays have turned urgent orders
to air freight causing high
demand at a time when Covid has
many airline fleets grounded.
Ocean import volume to the USA
through April, year over,
increased by 42%. The port of
Los Angeles is overwhelmed.
Inland port points of Chicago
and Memphis are extremely bad.
There are containers that are
grounded and in stacks, which
are subject to storage charges.
The lines are forcing forwarders
to pay when they cannot have the
containers available to us for
as long as three weeks.
On May 25th, Yantian, one of
China’s busiest ports, suspended
its export operations due to
congestion and a recent outbreak
of Covid that resulting in a
labor shortage. This closure
remained in place until the 27th
of May. Vessel schedules out of
Shenzhen were affected by this
disruption, which will compound
the current issues on the Asia
trade route.
What advice do you have for
publishers as they navigate the
supply chain crisis?
Specific to off-shore
production, we have suggested to
our clients that they diversify
between two continents and
spread the risk of delays. While
pricing out of Europe to the
U.S. is high, the transits are
better than Asia at this time,
including the delays. India’s
infrastructure, combined with
Covid and the recent typhoon,
have made that origin very
difficult in regards to overall
transit times. Stock (goods)
transfers from the U.S. to the
UK are also impacted as the
lines are blanking (cancelling)
sailings, capacity issues, and
generally longer transits.
In sum, pricing, space, and
schedule reliability are all
issues that we anticipate
continuing for the foreseeable
future. Because of this crisis
it is hard to guide our
publisher clients as to lead
times to make on sale dates, and
we have suggested double the
normal lead time, in general.
This is a good time to review
your shipping terms. Meadows Wye
is happy to review different
international commercial terms
and outline the benefits of FOB.
As the world is in a global
shipping crisis, Meadows Wye can
share our experience in freight
costs and transit times from
alternate print sourcing
regions. We offer ECPA member
discounts for customs brokerage
as well as free consultation on
preproduction. Contact Susie
Scally (susies@meadowswye.com or
call 718-983-9700) for a free
consultation on shipping and
U.S. customs brokerage.
-
Susie Scally, Director of
International Sales |
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To continue our 100 year history of
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US Customs Brokerage; Global Print &
Publishing Logistics, Transportation
to-and-from Asia, United Kingdom, North
America and Europe. |
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