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The blockage of the Suez Canal brought the shipping industry to the front page of all newspapers recently, leading everyone to realize just how fragile our supply chains really are, especially those that either wholly or in part rely on the global ocean shipping industry. While the incident at the Suez Canal provided an introduction as to how devastating port congestion can be, other ports have been experiencing never-before-seen delays as well, and the trend shows no signs of stopping.
Nevertheless, we continue to adapt and innovate, enabling us to find ways to address crises in our world as they arise.
In this article, we will review the issue of port congestion and discuss some of the tactics that can and should be employed to counteract the problem.
Put simply: COVID-19 did a number on the shipping industry. When government mandates and general fear caused a steep decline in orders early in the pandemic, shipping was ground to a halt. As the restrictions were lifted and we began to return to our “normal” ways, demand rose well past what was expected as consumers began to heavily rely on e-commerce for their shopping needs.
Additionally, shipping companies needed to transport medical equipment such as PPE and other devices, putting extra strain on the already taxed and understaffed system due to social distancing requirements and furloughed workers.
The issue of port congestion is not an easy one to solve as global political interests, weather considerations, and incredibly high demand are all forcing the supply chain to adapt on the fly. However, a number of solutions are slowly but surely developing, and government entities are attempting to help address the issue in whatever ways they can.
On Friday, July 16th, Secretary of Transportation Pete Buttigieg met with leaders of multiple governing bodies such as representatives from the FMC (Federal Maritime Commission), the MARAD (Maritime Administration), and others in order to discuss the issue of port congestion and to develop solutions to address the problem.
During the roundtable discussion, the group outlined steps that have been taken thus far and discussed what else still needs to be done in order to get past this port congestion issue. Some of the solutions discussed were:
Using the Resources of the Supply Chain Disruptions Task Force
In June of 2020, the Biden administration authorized the Supply Chain Disruptions Task Force to use federal resources in addressing problems throughout all of the supply chains, including oceanic shipping. This group has been instrumental in triaging the current crisis and helping to develop strategies to overcome the issue at hand.
Suspension of Detention and Demurrage Fees
President Biden issued an executive order which has temporarily addressed detention and demurrage fees (fines imposed for cargo that sits idly at a port for an extended period of time), but those present at the roundtable insisted that these fees need to be suspended for much longer in order to overcome the current congestion crisis.
Collaboration with The World Shipping Council
USDOT leaders have already met with representatives from other nations to combine forces in addressing this issue, but much more needs to be done in order to return the oceanic shipping industry to a more normal state.
While the government stepping in to help certainly provides some relief to those struggling through the problem in question, there is still much that can be done by private individuals and non-government entities.
One of the most important skills needed by those in the shipping industry at this time is that of effective communication. Fortunately, in the digital age we have numerous technological options available to us that can help to overcome the port congestion concern and improve communication:
Instead of pen and paper systems, electronic means should be emphasized wherever possible to track and process shipping vessels. Storing tons of information on a small handheld device as compared to writing down and referencing data in a large notebook is one of the best ways to streamline communication between all interested parties.
Container Tracking in Real-Time
Knowing where containers are at all times is essential for communication in this situation. Technology can provide many options for the tracking and processing of cargo and many apps are already in use and being developed to provide this data in an easy-to-read, convenient format.
The port congestion crisis is not an easy issue to solve, but it is one that can be overcome if all parties involved communicate and work together. With the federal government’s support, collaboration with other nations, and the use of the best available technology, we will slowly but surely navigate our way past this crisis and move towards a brighter future.