How to Adapt Your Ocean Shipping Strategy when Faced with Disruptions

Transporting freight internationally can be challenging. Available ocean capacity, shifting port receiving windows, and dray congestion are just a few common issues. Without proper planning, these and other disruptions can throw off an entire supply chain—delaying deliveries, raising costs, and lowering customer satisfaction.

Despite the list of ever-evolving ocean shipping challenges, there are several strategies you can use to overcome and avoid disruptions when transporting freight over the seas.

What causes supply chain disruption?

Understanding the common causes—both internal and external—of supply chain disruptions is essential for developing effective strategies to mitigate them. Here are some key factors that can lead to disruptions:

Natural disasters

Hurricanes, earthquakes, floods, snowstorms, and wildfires can severely impact supply chains. These events can damage infrastructure, disrupt transportation routes, and halt production, leading to significant delays and increased costs.

Climate change

In addition to natural disasters, ongoing climate change, like low water issues, are changing how goods move around the world. This issue is becoming more widespread, adding costs, and time to supply chains as ocean carriers are forced to limit vessel sizes and weights.

Global conflicts/geopolitical events

Political instability and regulatory changes often create uncertainty and disrupt supply chains. Tariffs, sanctions, and changes in the environment, safety, or trade policies can require adjustments in processes and documentation, leading to potential delays and increased administrative burdens. Other conflicts can lead to the potential closure of entire shipping lanes or trade embargoes that close off opportunities, not to mention increase costs due to war and contingency surcharges.

Labor issues

From global health crises to labor strikes, workforce shortages can lead to factory shutdowns, delays, decreased productivity, and increased operational costs, significantly affecting the availability and movement of goods.

Security threats

Cyberattacks and data breaches are becoming increasingly more common, disrupting supply chains by targeting critical systems and data. Both digital and physical attacks can lead to operational downtime, data or product loss, and compromised communications, affecting the efficiency and security of supply chain operations.

Demand fluctuations

Sudden changes in demand, whether due to market trends, seasonal variations, or unexpected events, can disrupt supply chains. Surges in demand on a regional or global scale can strain capacity, causing rates to spike.

Carrier alliance changes

As ocean carriers cancel old alliances and forge new ones, existing service offerings often change as well. This means canceled service strings, blank sailings, and disrupted schedules while the transition takes place. These changing relationships can also mean less competition on particular lanes, impacting rates.

How do ocean disruptions impact supply chains?

Disruptions in ocean transportation can have far-reaching effects on global supply chains. Here are some specific examples:

Tight ocean capacity

Many disruptions to ocean shipping can cause a significant reduction in available shipping capacity. Factors such as port closures, vessel shortages, and increased demand make it more difficult to secure space on ships. Another contributor is when containers become stranded at congested ports or become misaligned with shipping schedules, making it challenging to find the right equipment for shipments.

Congested ports

Congestion is a common issue that can make planning difficult. When ports experience bottlenecks due to high volumes of cargo, labor shortages, or inefficient processes, ships are often left waiting for berths, lengthening the time to dock and unload. These types of delays can quickly increase costs, including container pull and yard storage charges, daily chassis rental costs, and detention fees.

Increased shipping costs

Disruptions can drive up the overall cost of shipping. Often shippers face higher freight rates, surcharges, and demurrage fees, which when left unchecked, quickly eat into the bottom line.

Extended delivery times

Delays at ports, reduced vessel availability, blank sailings, and longer transit times can increase the time it takes for goods to reach their destination. This can affect production schedules, inventory management, and customer satisfaction.

Inventory shortages

Disruptions can lead to inventory shortages as goods are delayed in transit or stuck at congested ports. Businesses may struggle to meet customer demand, leading to stockouts and lost sales. This can also impact production lines that rely on timely deliveries of raw materials and components.

How to prepare for supply chain disruptions

Finding right strategies to address these challenges while still meeting existing delivery dates and budget expectations depends on your unique situation. Taking location, budget, distribution capabilities, and other factors into consideration can help ensure you find the right strategy for your current situation.

1. Diversify port/ramp locations

Reducing your reliance on a single port or rail ramp can help control shifting timelines and manage the availability of empty equipment. Whenever possible, choose places with robust infrastructure, efficient customs processes, and lower congestion levels. Diversifying your port and ramp choices means more options in case of disruptions at your primary location.

If you are currently using rail ramps and can’t move cargo closer to your chosen ports of loading, truck and transload service can be an option to reduce transit times, increase cargo payloads, and avoid rail disruptions.

However, it is often an expensive choice, so consider your budget when making such a decision. In addition, be alert to the potential risk for warehouse space shortages as well as potential damage to cargo with the necessary rehandling between different modes. So, consider carefully before choosing this strategy.

2. Nearshore or reshore

Reshoring brings the production of goods back to the company’s home country, while nearshoring involves sourcing from neighboring or ally countries. Both can help reduce reliance on long ocean voyages.

Manufacturing goods closer to primary markets can also lower transportation costs, reduce lead times, lower carbon emissions, complement supplier diversification efforts, and minimize the risks associated with international shipping.

3. Maintain higher inventory

Booking shipments well in advance and using accurate demand forecasting can help secure capacity and avoid last-minute disruptions.

Early shipping is a proactive step to get ahead, ensure availability, and minimize the risk of delays caused by unforeseen disruptions. By having products already in regional warehouses, it is easier to respond quickly to fluctuations in demand and address unforeseen challenges.

4. Prioritize disruption planning

Having a contingency plan in advance of an actual disruption allows for quick responses when an issue arises. Engaging in scenario planning can be one aspect of disruption planning.

Your plan should outline potential risks and include mitigation strategies to take in the event of a disruption. Regularly reviewing and updating the plan can help companies stay prepared for a wide range of scenarios.

Plan and forecast for ocean shipping disruptions

In global shipping, disruptions may shift, but they will never disappear altogether. It’s important to be prepared for potential factors from vessel capacity constraints to schedule reliability and equipment availability. The right strategies for your budget and objectives combined with proper planning can help you keep cargo moving—no matter what you’re up against.