Whether disruptions are happening or not, shippers should have contingency plans in place, which is a hard lesson learned during the pandemic

As that crisis subsided, 2024 has remained challenging for ocean shipping stakeholders. Risks along the Red Sea have extended transit times, leading to congestion at some Asian ports. With higher ocean rates and an imminent East and Gulf Coast labour contract expiration, shippers face a volatile market.

Transport and logistics experts shared their insights on the current risks and strategies to mitigate supply chain disruptions during Industry Dive’s live event on July 24, “Supply Chain Outlook: Trends and Risks To Watch in 2024.”

Here’s what the experts suggest logistics industry stakeholders should do to navigate the rest of the year:

Diversification: Back to Basics

Supply chain disruptions loom at U.S. ports. The International Longshoremen’s Association’s master contract with the United States Maritime Alliance expires on Sept. 30. While negotiations continue, preparation is crucial to mitigate problems. Experts suggest that diversification is a powerful tool to minimise potential disruptions, a lesson many retailers learned during the pandemic. Diversifying ports during contract negotiations for West Coast dockworkers provided reassurance and preparedness, a strategy that shippers can rely on.

Hedge Cargo, Don’t Push It All

Trucking typically feels the impact when service issues arise at the ports. Experts advise clients to avoid problematic areas. One option is to move certain Stock Keeping Units (SKUs), which are specific product types or variations, through the Panama Canal to the East Coast. Shippers should avoid moving all cargo to the West Coast due to concerns about significant congestion from increased volumes shifting to those ports.

Another lesson from post-pandemic congestion is ensuring drivers can enter all ports in certain regions. Drivers from Southeast ports, such as Jacksonville, Charleston, and Savannah, can enter ports in the Northeast, such as Norfolk, New York, and Baltimore.

Whether or not an East and Gulf Coast labour strike happens, decisions surrounding a potential strike can have ripple effects along the supply chain. Simply navigating the uncertainty is already changing patterns and bookings. After navigating the West Coast port labour negotiations last year, experts recommend that shippers be prepared for service disruption situations. This preparation involves having the suitable capacity and adequate network to operate outside and avoid problem areas while fulfilling shippers’ needs. Additionally, maintaining the visibility of containers is crucial, as well as knowing where they are, when they’re going to discharge, and what’s happening to them outside the terminal.

Planning Starts Today

Planning for potential disruptions and delays should start today. This proactive approach can help shippers identify potential risks and develop strategies to mitigate them. Another concern for shippers is possible peak season delays and what they should do to reduce risks. Peak season, typically occurring in the months leading up to major holidays, is a period of increased shipping activity and can lead to delays. Experts note that peak season came early this year and will probably last a few months. Delays have emerged in the Transpacific Eastbound shipping lanes, with significant space shortages driven by uncertainty in the ocean market. Port congestion is widespread in Southeast Asia, indicating delays are an ongoing issue.

Shippers should foster stronger relationships with carrier partners and leverage other freight modes, such as intermodal and airfreight, to stay agile and adapt quickly. These strong relationships provide a sense of connection and support, which is crucial in navigating the challenges of the industry. Leveraging the latest technology also fosters a sense of empowerment and control.

In summary, while the challenges 2024 are significant, shippers can mitigate risks by diversifying their strategies, avoiding problematic areas, ensuring flexibility in their logistics operations, and fostering strong relationships within the industry. Preparation and visibility are crucial to navigating the volatile ocean market and ensuring a resilient supply chain.