Container and Shipping Impact on Supply Chain

Container and Shipping Impact on Supply Chain

If you are a frequent Amazon shopper, an introvert who just prefers ordering online, run a business that relies on products, or just pay general attention to the world, you may be panicking at the shipping delays occurring. Products are on backorder, and many retailers are not sure when product availability will return. If you are in the shipping and packing industry, there is a good chance you are being affected by the recent oil spills, increased port volumes, extended hours, or rising costs.

The Aftermath of an Oil Spill on Shipping

As if the supply chain wasn't congested enough, more than 25,000 gallons of oil wound up on the coast of Orange County, California causing shipping containers to be more backed up than ever. With authorities scrambling to contain the damage from the spill, we are waiting to see the permanent damage to the shipping industry. Impacts of this oil spill could last years, and with the supply chain struggling to get back on track, they lack the predictability and precision to move quickly post-disaster.

The already large number of container ships waiting to get into the nation's largest port increased exponentially, creating chaos and increasing cargo volume to dangerous levels.

Port Volume

With the peak holiday season upon us, suppliers are bracing for impact, knowing the shipping crisis is out of their hands. Port volume hits a record peak, and with cargo ships queuing up, they now wait from 10 to 21 days to move into a berth. Post-pandemic consumer buying habits have changed through the last few years, with people spending more money on physical products and goods that need to be moved rather than services people can provide.

Following the prolonged pandemic, companies have already released their holiday deadlines for 2021 Christmas shipping. UPS, FedEx, and USPS have shipping deadlines almost identical to the 2020 shipping deadlines, meaning that the pandemic impact hasn't yet subsided, and many last-minute shoppers could face disappointment yet again this year. With the number of ships in the ports slowly increasing, supply chain experts are warning buyers that if they want a present-filled Christmas, they need to order sooner rather than later. To ease the strain and get people their packages, the government has suggested extending hours to solve the supply chain crisis.

Extended Hours

With the world slowly beginning to open back up, companies are battling what feels like a never-ending labor shortage. Customer-facing businesses that closed during the pandemic are having difficulty filling positions and getting back on track. The Covid-19 pandemic temporarily shut down 24/7 opportunities for companies such as McDonald's, Walmart, and gas stations. With the lack of employees willing to work in the day, let alone at night, they cannot find enough staff to fill the positions needed to reopen to regular hours. Willing employees working are already maxed out on hours, and any company pushing for 24/7 access will have to increase employee pay to do so.

The trucking crisis adds to the growing list of issues, not helped by a 24/7 extension. Labor shortages have left the trucking industry in shambles. Companies have had to double the amount they are willing to pay, desperately trying to bring in drivers from abroad to no avail. Most manufacturing companies never stopped running during the pandemic. Still, they have been forced to make drastic changes in the prices of their goods and constantly be on the hunt for reliable employees.

Rising Costs

Inflation is at an all-time high. Shipping prices are forced up, and the cost of raw materials is continually rising. Demand for shipping rose from stimulus checks, work from home, and employees working overtime to meet the needs of their customers. The inflation rate has reached 2.4% this year and is expected to decrease to 2.1% by 2023. Until then, we continue to do whatever it takes to meet the needs of our clients.

As a packaging company, providing a professional service to commercial and industrial businesses, we see the impacts on the supply chain firsthand through shipping delays, warehouse chaos, and labor shortages. We know our clients face the challenge of raising manufacturing prices, and we work with them to get the assembly and packaging they need done as quickly and accurately as possible.

As you continue to adapt to the changes and challenges your company is facing, Component Packaging is here to help. Whatever it takes!

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