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Overcoming the challenges faced in supply chains
Overcoming the challenges faced in supply chains

In recent months, COVID-19 has put incredible pressure on global supply chains. But it’s not just the pandemic that is causing unforeseen pressure on the UK supply chain. We have an ageing infrastructure, a chronic HGV driver shortage, record-high prices and record low space availability on sea freight options, new rules in trading with the EU, and in addition, a UK-wide shortage of warehousing capacity. While we have had to stay at home, online shopping has peaked and an increasing amount of goods have been transported across the globe. According to UNCTAD, maritime logistics represents 90 percent of the world supply chain. Therefore, ports are an integral part of global trade. Ensuring uninterrupted supply The global freight market is under extreme pressure at the moment, and port congestion results in container vessel delays which might lead to demurrage charges for cargo owners. These are genuinely unprecedented times, requiring decision makers across a wide variety of sectors to think hard and think differently when it comes to ensuring uninterrupted supply throughout peak season and beyond. A multi-modal approach can meet the client’s needs in the best way allowing them to react to change A multi-modal approach can meet the client’s needs in the best way allowing them to react to change and automatically make amends to the plan, in accordance with the issues being faced. However, end-to-end supply chains rely on assets and you’re only as robust as the amount of ships and/or operators involved. The industry has faced many challenges with Brexit, Christmas, COVID-19 and the Suez Canal and although some can be seen as isolated incidents, they have happened and they will again. Improving any breakdowns It’s difficult to prepare for the unknown and when it might happen but I think operators have a great way of gathering the data following these events and use it to improve any breakdowns in the chain in preparation for if there’s a next time. As a result of the pandemic, shipping companies took ships out of the sea due to reduced demand but it’s interesting that demand is now increasing and yet the numbers of ships back out at sea hasn’t increased alongside. The cost of using ships has rocketed - one customer importing from Japan used to pay £900 per container, now it’s £7,000 and even £14,000 from China. Port-centric warehousing We really need everyone working together to benefit all parties - it’s very one-sided at the moment So, we’re seeing prices remaining high with fewer ships operating - what incentive do operators have to get more ships back out onto the water and get back to where they were, when their income is healthy with reduced numbers? We really need everyone working together to benefit all parties - it’s very one-sided at the moment but I understand that companies could be remaining cautious with a fast return to pre-COVID while the pandemic is still impacting life. Looking ahead, I think autonomy is going to be huge and we’ll see the reliance on trained operatives being removed. Autonomous shipping is already being trialled and of course, the capabilities of drones is only going to improve in the future. Whilst there is no silver bullet for the combination of complex challenges we face, one suggested approach is to put port-centric warehousing at the heart of your UK distribution strategy. National rail infrastructure The port-centric model is very simple. Rather than transporting your goods hundreds of miles inland to primary distribution centres, the storage facilities are located close to, or within key ports. By doing so, you take costly, time-consuming links out of the supply chain, replacing them with seamless, simple solutions from ship to doorstep. Another option to consider, which again takes links out of the supply chain, is to utilise the rail network within the port for onward transportation. We’re fortunate at Solent Gateway to offer a dedicated rail link which is connected to the national rail infrastructure and can provide a direct route for freight whilst reducing traffic on the roads. At Solent Gateway, we are committed to solving customers’ supply chain challenges and support businesses that seek facilitation of logistics hubs, business parks, storage, sea to rail, sea to road, automobile, project cargo, general cargo, dry bulk and break bulk.

Backlogged ports among symptoms of global supply chain disruption
Backlogged ports among symptoms of global supply chain disruption

Backlogged ports, a shortage of shipping containers and not enough workers are among the factors contributing to supply chain disruptions that have led to shortages of various goods and are likely to impact availability of merchandise, during the upcoming holiday season. Demand is growing rapidly as the impacts of the COVID-19 global pandemic have diminished. However, lingering consequences of the pandemic are continuing to impact the container shipping market. With each element in the system tightly intertwined, any changes tend to ripple with additional repercussions. Slow circulatory movement of containers A direct upshot of the COVID-19 pandemic was to slow the circulatory movement of containers globally. To increase productivity and save time, some vessels began making their return journeys empty, in effect leaving more empty containers at the delivery destination and fewer at the source of shipments. The varied timing of the pandemic in Asia and the West compounded the problem At one point, Asian containers could not be sent back to Asia, because of COVID-19 restrictions in place. The varied timing of the pandemic in Asia and the West compounded the problem. With empty containers stacking up in the West and a shortage in the East, slower circulation of containers and higher demand have led to sharp increases in costs. Millions of TEU dry container units added A lack of new equipment is not the problem. Last year, the industry added about 2.8 million twenty-foot equivalent (TEU) units of dry containers, in line with the 10-year average. Congestion at ports has been going on for months and still continues. Recently, in the San Pedro Bay region, near the Port of Long Beach, in California, there were 144 ships, including 85 ships that were waiting to unload. In Savannah, Georgia, more than 20 container ships were waiting to dock. Ports in the US states of New Jersey, New York and Texas have also seen record backlogs. Majority of influential global ports face backlogs According to one report, 77% of the most influential ports in the world reported above-average wait times this year. The turn-around time for a container in ports has nearly doubled in 2021, in comparison to 2019. A worker shortage at the ports is aggravating the problem and container ships now carry about 30% more goods, which require more labour to unload. Ports are also doing the additional work with fewer people. There is also reduced labour productivity at warehouses and marine terminals. Investment in workforce training to counter bottlenecks Some port bosses expect the bottlenecks to last through the summer of 2022. To address the problem, some ports are investing in workforce training and scheduling night-time appointments to pick up goods. Although a lot of attention is focused on the ports, they are just one element in the troubled supply chain. Even if the ports could increase their capacity, downstream processes would also have to increase their labour force, to accommodate the higher volume. Difficult to absorb impact of global supply chain disruptions In the best of times, the global supply chain operates like a well-oiled machine In the best of times, the global supply chain operates like a well-oiled machine, despite its complexity and the inter-relatedness of various stakeholders. However, the sheer size of the system makes it difficult to absorb the impact of any disruptions. Turning the system around takes time, and a burgeoning global demand for goods, in the aftermath of a global pandemic, makes recovery even more difficult. The Biden Administration in the U.S. has established a Supply Chain Disruptions Task Force, to monitor and address short-term supply issues. This task force is convening meetings of stakeholders in industries with urgent supply-chain problems, such as construction and semiconductors, to identify the immediate bottlenecks, as well as potential solutions. Role of global supply chain more critical now There have been supply chain disruption and staff shortages in several countries, including the United Kingdom (UK), Germany and New Zealand, according to business surveys. As the economy recovered and demand increased, businesses have not yet been able to bring inventories fully back to pre-pandemic levels, causing inventory-to-sales ratios to fall. The role of the global supply chain has never been more critical.

Crew change crisis continues more than 18 months into the pandemic
Crew change crisis continues more than 18 months into the pandemic

Shipment of goods around the world has continued throughout COVID-19, but the pandemic has afforded unprecedented challenges to the maritime industry. When the pandemic necessitated health restrictions and limited international travel, the impact on crew change practices was monumental. More than a million seafarers work in demanding conditions to support 80% of world trade. Crews were trapped on board vessels for months and months, unable to return home and extending their tours of duty indefinitely. Especially impacted were major crew change port countries in Asia where the majority of seafarers reside. Protective health measures Seafarers are facing extended tours of duty and high levels of fatigue that could lead to a serious accident More than 18 months into the pandemic, the ongoing crew change crisis appears as intractable as the disease itself. Seafarers are facing extended tours of duty and high levels of fatigue that could lead to a serious accident. Thousands have been left stranded on ships beyond the terms of their contracts. If the crisis has an impact on safety, ships may be unable to continue operations, which could threaten the global supply chain. The International Maritime Organization (IMO) has issued a Framework of Protocols for crew change, recently updated, including recommendations such as designating marine personnel as ‘key workers,’ exempting them from travel restrictions, simplifying requirements for identity documents and approvals, implementing screening procedures, and providing basic protective health measures against COVID-19. Key maritime hubs Recognising a shared responsibility to resolve the crew change crisis, more than 800 companies and organisations have signed the Neptune Declaration on Seafarer Wellbeing and Crew Change. The declaration’s action points include recognising seafarers as key workers, implementing ‘gold standard’ health protocols, and ensuring air connectivity between key maritime hubs for seafarers. The declaration also promotes more collaboration between ship operators and charterers to facilitate crew change. The declaration’s action points include recognising seafarers as key workers Data from the 10 largest ship managers reflects a 50% increase between May and July 2021 in the proportion of seafarers onboard vessels beyond their contract expiry. The fast-spreading Delta variant has aggravated the problem, and a report for July suggests the problem is getting worse. The Maritime Labour Convention says the maximum continuous period a seafarer should serve on board a vessel without leave is 11 months. Crew change crisis However, the number of seafarers aboard vessels beyond their contract expiry has risen recently from 5.8% to 8.8%. The International Transport Workers’ Federation (ITF) estimates that more than 300,000 seafarers have extended their working periods on board due to delay in connection of their relief. Factors aggravating the crew change crisis include: There are many stakeholders with shared responsibilities that must be addressed. Collaboration and transparent sharing of information are needed to solve the problem. Working together is the only path to a solution. Lack of vaccine availability. Seafarers in developing countries do not have access to vaccines. Large seafarer nations such as the Philippines are reporting vaccine shortages. Priority access to vaccines is a critical factor in resolving the crew change crisis. Continuing high infection rates and domestic lockdowns. Given the Delta variant and other factors, it is clear the pandemic is far from over. Supply chain demands The crew change crisis has gone on for a year and a half, with the highest cost falling on seafarers, their health, and their families’ wellbeing. The importance of maintaining the global supply chain demands that the industry, the biggest ports and the key shipping transit points around the globe work collectively to address the lingering challenges of the crew change crisis.

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