U.S. ports are seriously congested, and the delivery of the goods is delayed by 45 days! The former importer of sea cargo is willing to spend more money on air freight

The prosperity of the shipping market continues. After the Spring Festival, the congestion problem of European and American ports has not been alleviated as expected. Instead, it has spread everywhere. Major international ports such as Los Angeles, Oakland, Rotterdam, Hamburg, Liverpool, Le Havre and other major international ports continue to be congested. , Chittagong and Singapore are not immune.

According to a US media CNBC report, retailers such as Peloton are facing a costly logistics nightmare as record congestion in ports around the world causes delays.

MarineTraffic's global transportation data shows that between December 22 and January 2, a boat carrying 197 containers of bicycles and commodities was parked outside the Port of Los Angeles. After Christmas, the ship was allowed to dock, but was delayed by 12 days with the expected delivery time.

The difficulty in transporting goods faced by bicycle retailer Peloton is just one example of all kinds of goods stranded in US ports.

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▍The congestion of sea transportation forces more goods to choose air transportation

The arrival of a record volume of containers at the Port of Los Angeles slowed down imports from the United States. The congestion in the port caused some companies to abandon sea operations and use air transportation in order to deliver popular or seasonal products to shelves more quickly.

"Although air cargo was in a period of volatility in the first few months of the outbreak, it increased by 400% from February 2020 to April 2020. When ocean freight became a bottleneck in the global supply chain, in some cases, air freight Become a more viable option." Freightos Chief Marketing Officer Eytan Buchman said.

Peloton CEO Josh Foley said in the letter: "The growth of global transportation business has caused serious delays in all kinds of cargo entering U.S. ports, including Peloton products." "These unpredictable delays have made it difficult for many people to arrange delivery times. Because Peloton bicycles, pedals and accessories have been stranded in the port five times longer than usual."

▍Congestion in Los Angeles and Long Beach ports continues, but air freight prices are falling

According to MarineTraffic data, as of Monday, there are 30 container ships moored outside the ports of Los Angeles and Long Beach. It is estimated that by the end of March, more than 30 container ships will arrive in Los Angeles, and at least 27 ships are scheduled to dock at Long Beach by then.

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As of March 1, 2021, cargo ships are waiting to dock outside the ports of Los Angeles and Long Beach
Among the ships waiting to be unloaded in Los Angeles was the APL Charleston, which carried Peloton's delayed delivery in December. The ship was again fully loaded with Chinese export goods on February 18.

Adil Ashiq, MarineTraffic's executive officer for the Western United States, said that delays in December were not uncommon.

"This is the reality that many ship, supply chain and logistics providers are currently facing in the Port of Los Angeles and Long Beach," Ashiq said in an interview. He also said that last week, the average time a container ship berthed outside the terminal was a little more than 7.5 days before it could enter the inland.

"Now that the APL Charleston has returned to the berthing location, it may face a situation similar to that when it arrived at the port in December last year. Of course, when the cargo is being transported, anything can happen." Ashiq said.

Port congestion increases the cost of shipping, making air freight, which is usually much more expensive, relatively cheap, especially considering the time saved. In recent months, air freight prices have also fallen sharply.

 Ashiq said that the price of airfreighting 250 kilograms of cargo from China to the United States has dropped from 60% of the cost of a complete container to around 36%.

Freightos' Buchman said: "In other words, for the right type and value of goods, air freight is definitely a more attractive option because its capacity and transit time are much faster."

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▍Once shipping goods turned to air transportation

Brian Bourke, chief growth officer of Seko Logistics, said that for some customers trying to meet consumer demand, the time and cost savings of shipping products are equivalent.

Bourke said: "If you want to ship a hot tub from Shanghai to New York by sea, the transportation cost of a light hot tub is about $1,000, but it will take at least 35 to 45 days." He added that if you need to book in advance , This does not include the additional 7 to 14 days. Depending on the weight, the freight for air freight ranges from US$2,000 to US$3,000.

"But it only takes three to four days to get the hot tub by air. Therefore, paying two to three times the cost can save you four to seven weeks. For some shippers, this mathematical calculation is meaningful."
Kim Peterson, transportation manager of bicycle importer Canyon bicycle USA, said that most of the company's inventory is shipped by water, but he added that the most popular bicycles are shipped by air to meet the surge in demand.

"Air freight is faster, and we need to meet customer needs." Peterson said, "In China, I can spend 1,000 to 2,000 US dollars more to put my products into (sea) containers and rank first in the queue, but this is not It’s important because the cargo will be congested in Los Angeles later on."

Peterson said it would take 20 to 30 days for shipping to occur before the outbreak. Now it takes about 60 to 75 days, while air freight takes 3 to 5 days.

"This is a huge difference." He said: "We currently have out-of-stock orders. We can't wait. This will have an impact on sales."

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Shawn Richard, SEKO's vice president of global air cargo, said that he does not expect the high congestion level to be alleviated in the short term.

Richard said: "We often airlift 65-inch TV sets from China to the United States. We have seen a 40% increase in air freight in December, and large items like hot tubs are also being shipped. Our shipping team is now recommending air transport."

Richard added that large home entertainment products such as table tennis tables and sports equipment such as treadmills are usually shipped by sea due to cost issues. Now, due to the epidemic, people only stay indoors and look for ways to stay healthy and entertain outdoors, leading to a surge in demand. These goods are being transported by air.

"Barbecue equipment and related items, such as lawn/yard furniture, inflatable swimming pools, filter equipment, and all items that can be used to improve the home experience of the family, are now being shipped by air." He said.

Matt Castle, vice president of CH Robinson's air freight products and services, said: "We see that those goods that need to be transported faster are forced to be transported by air, instead of'waiting in a hurry' in coastal areas."

He said that recreational vehicles and parts that were previously transported by sea have been transferred to air transport. "I never thought we would see vacuum cleaners being airlifted, but it happened now."