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Capacity Opportunities Remain 5-12-21
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May 12, 2021

Capacity Opportunities Remain, but Timing and Cost Can Be Tough

Capacity Opportunities Remain, but Timing and Cost Can Be Tough

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The current capacity crisis leaves companies with few ways to ship quickly.

In a recent webinar, Flexport ocean experts reviewed how a wave of demand is taking over key global ports. As hotspots of congestion pop up on both the origin and destination sides, a ripple effect takes over inland.

Creative solutions may come to the rescue—if you’re prepared to jump on last-minute opportunities. Here are a few types of options worth exploring:

  • Companies that can get cargo to certain ports on time may be able to get on charters or extra loaders. These sailings run in times of tight capacity between extra-high demand ports.
  • Fast boats can guarantee space within a specific network, shown on a slide below. The cost may be offset by the value of having goods in hand when you need them.
  • Technology can reveal opportunities for consolidation. Pairing your cargo with other cargo going to the same place at the same time can pack more into containers.

For the details on which ports are feeling the heat or how some of these solutions may work for you, read the transcript below or watch the webinar, Tide Of Scarcity: US Ocean and Trucking Urgent Update.

Disclaimer: The contents of this webinar are made available for informational purposes only and should not be relied upon for any legal, business, or financial decisions. We do not guarantee, represent or warrant any of the contents of this webinar because they are based on our current beliefs, expectations and assumptions, about which there can be no assurance due to various anticipated and unanticipated events that may occur.


Excerpted from an auto-generated transcript

Adam Parish: . . .So if you're joining us today, I imagine the keywords scarcity and urgent in the title likely resonate with you. And for good reason, we're all experiencing what is by definition, the most distressed global shipping market in history, across many different areas.

Joanna Zhang: . . . Let's take a look at a number of demands of the ocean market.

Imports from Asia to the US reached some of the highest levels ever recorded in the past few months. Here's a graphic showing imports in March, 2021 has an increase of 80% compared to March, 2020.

Overall consumer demand has been strengthened by strong buying patterns of furniture products and home ledger items, which have represented a strong portion of the 3 million TEU of the total imports to the US in March alone. And all of that close to 1.8 million TEU. volume is actually on TPEB trade.

Read More: Live: Capacity Crisis Overwhelms Ocean and Ground as Demand Roars

So will this demand stop? When will this stop? Currently, there's no sign for slowing down.

According to the IMF, the economy is actually projected to grow 6% globally and 6.4% for the US in 2021 and further grow in 2022. So we might expect demand will remain high and strong. The high demand drives the rate higher.

Read More: IMF World Economic Outlook April 2021: Global GDP to hit 6%

On the other side, our capacity situation with the Suez Canal incident is putting current equipment imbalance and vessel shortage in the worst case. This situation might extend to Q3 and even Q4 . . .

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Joanna Zhang: . . . We are looking at 2023 to 2024 [before] new capacities enter the market . . . Shippers might want to consider alternative options such as air or consolidation options for partial and urgent orders.

Drayage Rates Spike as Productivity Slows

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Ocean Solution: Extra Loaders

Rohit Kundurthi: . . . We do have a couple other strategies here on the ocean side . . . The name of the game here is going to be flexibility and agility . . .

[Charter vessels and extra loader opportunities] . . . are one-off vessels that carriers will run on only a handful of lanes. So they'll only call [on] a few [ports], and carriers are running these because they can capitalize on extreme demand in a few regions that they know they'll be able to utilize a hundred percent of their available space on a vessel.

. . . They come with some of the highest levels of enhanced equipment security that you can get in the market at any time. Since these are one-time sailing deals, once you book, the space is yours.

However, the kind of flip side to these opportunities is that they are first-come, first-serve. Space fills out extremely quickly. The key here is really—once you hear about this opportunity from us—definitely move and identify to see how much volume you can fit onto this opportunity, and get those bookings placed in the system as quickly as possible.

That's going to be the way that you maximize securing your spot on the vessels and making sure that you can really chip into backlogs that you might have piling up or get some of that urgent cargo out of port in Asia and on the water as quickly as possible.

Ocean Solution: Flexport Fast Boat Network

Rohit Kundurthi: Now, we know that at some point every client is going to face an urgent situation where your inventories need to be replenished or volume just needs to move immediately as quickly as possible, no matter the circumstances and environment that we're facing in the market.

One way that we can help sidestep some of those challenges is by leveraging our network of fast boat services.

These services don't only just come with faster-on-the-water transit time and end-to-end transit time. They also have expedited destination services, such as priority discharge and expedited rail to inland locations.

They also provide some of the highest levels of equipment prioritization and security from carriers, because they are that top-shelf highest level of premium service in the market.

[Flexport fast boat shipments are for] where you need the best possible line of sight into whether or not you have equipment secured, what specific sailing that you're targeting, and you need your goods to arrive to the States by a certain date.

We highly recommend targeting one of the routings highlighted above on this screen because we have a fast boat service that could line up with your supply chain needs.

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Ocean Solution: Consolidations

Ignacio Conde: . . . As we've been saying, flexibility is key for supply chain survival . . . So, here at Flexport, we've been trying to leverage ocean consolidations for our customers more and more. And we've been having a great success with this strategy.

Obviously, we acknowledge that consolidations cannot solve the capacity crunch, right? But with this solution, we've been able to provide 30, 50, 80 CVMS per week of capacity. And that can really make a difference for small customers . . .


Ignacio Conde: One product that I want to particularly touch upon is OceanMatch.

OceanMatch is a Flexport-unique solution that matches an empty or not fully utilized container with some LCL cargo that comes from other Flexport bedded customers.

What OceanMatch does basically is to improve utilization across the whole industry . . .

Read More: Filling Up Underutilized Ocean Containers with OceanMatch

Read More: On the Hunt for Cargo Space, Smarter Consolidation Could Ease the Way

I really encourage all of you to reach out to us, ask about OceanMatch, but not only OceanMatch, because we also have other solutions for consolidations, like premium solutions from different ports . . .

To hear the full conversation, watch Tide Of Scarcity: US Ocean and Trucking Urgent Update. Or to join our experts next time and submit your own questions, check out our upcoming webinars.

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