If you are a regular exporter or importer, you will know shipping delays can cost you heavily and lead to missed delivery deadlines. Delays can also result in congestion in the ports, crowding in the container yards, and needless demurrage and detention charges. The most frustrating thing about shipping delays is you can do very little about them.
Causes of Port Delays
According to the International Monetary fund (IMF), ocean freight accounts for more than 80% of the world’s trade. You can experience delays even if the ships arrive on schedule, but the loading and unloading take more time than anticipated. Some of the most common causes of port delays include:
Sub-optimal infrastructure capacity: The extent and sophistication of port infrastructure are critical for its smooth operation and ability to handle large freight volumes. Surprisingly, many ports do not have an adequate or technologically advanced infrastructure to handle the freight efficiently. The lack of machinery and equipment, in addition to labor, causes bottlenecks and resultant delays.
Container imbalance: If shippers use certain ports primarily as entry points, it can result in the container piling up and causing congestion. However, by using technically advanced software solution like cargo runner shippers can have more control, transparency, and visibility of cargo to improve productivity and customer satisfaction.
Unforeseen events: Ocean freight is fraught with several unpredictable events and circumstances. For example, the weather can be bad, there can be accidents, epidemics, or you could have political or industrial unrest. All these events can happen without notice and cause supply chain disruption and delays.
Customs clearance: Customs departments worldwide follow strict rules and regulations. The lack of proper shipping documents can hold up container clearance, causing delays and port congestion.
Lack of automation: Even though leading ports have recognized the benefits of automation, many ports still depend heavily on manual processes. The lack of advanced automated and digital freight handling and logistics solutions reduces operational efficiency and causes delays.
Labor shortage: Ports need a lot of labor to handle the many manual tasks. In many ports, consignments get habitually delayed due to the shortage of warehouse workers, dock workers, and truckers.
Effect of Port Delays
Port delays have multiple impacts. Manufacturing of products gets delayed if raw materials and components don’t arrive on time, and sales can slow down if the finished goods can’t reach the markets. Delays mean more inventories stockpiled, seriously affecting the cash flows. The risk of damage to cargo, especially perishable goods like drugs and food, increases the longer they take to arrive at their destinations. Port delays increase the consumption of fossil fuels that power ships and port machinery releasing more greenhouse gases and pollution. Moreover, shippers have to pay detention charges and demurrage unnecessarily.
While it is easy to understand the causes and effects of port delays, there is very little shippers can do. However, they can avoid delays by avoiding congested ports, redistributing cargo among several vessels to increase the chances of at least part of the cargo not getting delayed, and leveraging automation and digital technologies like real-time container tracking.