Shipageddon Thru May, Plan Ahead

S h i p a g e d d o n T h r u M a y , P l a n A h e a d

March 17, 2021

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Firsdtea Blog, Reports, Trends

Firsd Tea continues to remind our customers to prepare for delays and disruptions in the supply chain. The causes and effects are global and are creating challenges for all of us who rely on international and domestic logistics.

PREPARE NOW WITH PROJECTIONS

The best preparation to make is projection. Please speak with your Firsd Tea representative to increase the probability of timely availability of your tea supply.

SUPPLY CHAIN FACES FURTHER BREAKDOWNS

Ocean freight and transport problems continue to ripple through the international supply chain, with acute effects on US logistics:

The Executive Director of the Port of Los Angeles warned that the backlog of cargo at the ports of Los Angeles and Long Beach may take 3 months to clear
As of February 17th, 21 container vessels were at anchor at the Port of LA. The average wait time for these ships is 8 days
The National Retail Federation anticipates demand for imports will produce record levels of container volumes stretching into the summer
Once unloaded, cargo can wait 7.6 days for space in warehouses compared to 3.5 days before the Shipageddon surge
The FBX recently put spot rates from Asia to the US west coast at $4,922 per 40ft, 2-3 times the normal rates

With rates at record highs for shipments out of the East, ocean carriers are responding by returning to Asia (China) as quickly as possible, often with empty holds to make as many trips possible on the most profitable direction of the round trip.

OTHER CONTRIBUTING FACTORS

Events are coming together to make a bad situation worse:

Personal consumer spending that used to be directed toward air travel, dining, and other services is diverted towards more tangible goods
The Texas snowstorm further exacerbated problems as transport service lines through the port of Houston were delayed and rerouted
Longshoremen, warehouse workers and other key segments of the workforce become understaffed by Covid quarantines and Covid infections

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