Challenges Associated With Ocean Freight

22 Jun, 2022 by Pulkit Bhola - 4 min read

Ocean freight is considered to be an ideal mode of transport for heavy shipments, but it comes with its own risks and disadvantages. It can be relatively slower than other modes of freight, and bad weather can further add to the delay.

Sea routes and timetables are generally not that flexible. Tracking your packages is sort of difficult. After all, you’ll anyway need land transportation services to reach the final destination.

Ocean freight

On top of this, the global ocean freight industry has been going through a rough phase lately. Ever since the pandemic hit, shippers have been facing a severe capacity crunch resulting from container shortages, port congestion, and all-time high freight rates. 

This has put the very existence of lower-margin businesses at risk. Therefore, delivering your packages successfully through the sea route is nothing short of a challenge.

Five Big Challenges Facing Ocean Freight

The global logistics industry has been under pressure recently as the fluctuations in supply and demand are increasing operating costs and damaging the bottom line. Supply chain problems have been making headlines for a while now. Everything from the COVID-19 pandemic to Brexit and the Russian invasion of Ukraine has been cited as the reason for supply shortages and the issues transporting products from one part of the world to another.

One element of the supply chain which gets relatively less attention are the problems faced by the ocean freight business. Preferred by businesses seeking more sustainable and profitable alternatives to air transport, ocean freight has risen in popularity recently but, unfortunately, comes with its own set of concerns. Let’s understand them one by one.

Ocean freight challenges

Shipping Container Shortage

After the pandemic was declared, many manufacturers closed operations in response to the falling demand. As a result, many containers usually used to ship manufactured goods stopped moving, were stored at ports, and were no longer picked up. This limited the ocean freight capacity quite significantly.

Rising Freight Costs

The global container shortage led to an increase in the ocean freight rates by over 300 per cent for the main shipping routes, which continues to be very high. Freight costs of lower-value products like household items, toys, promotional articles or t-shirts have risen from around 5% of their sourcing costs to more than 20%.

Port Congestion

Most of these containers are still stuck where they’re not required. Ships arrive at the port but cannot load or unload as the port capacity is already more than full. The only option is to queue up and patiently wait for your turn to get space at the port. This means a loss of time and, consequently, money.

Lack Of Carrier Capacity

Another major problem businesses have to face today is securing capacity for the shipments with the carriers. The carriers are overburdened, and this is decreasing the overall trustworthiness of ocean freight services.

Rolled cargo is one of the most common challenges. This term refers to a situation when a container couldn’t be loaded due to customs limitations, wrong documentation, or overbooking.

Port skipping, blank sailing, and delays are a few other hurdles.

Crew Shortages

This is one of the biggest roadblocks in ocean freight transportation. There is simply a shortage of new shipping professionals. As experienced personnel retire, not enough new resources enter to replace them. This has made it difficult for the industry to meet current levels of demand and move forward.

The Way Forward

As a global logistics industry, we’re all in this together. Shippers, forwarders, ports, carriers and technology platforms like Rocketbox each play an essential role in the ecosystem and must come together to work jointly to find solutions.

While it’s nearly impossible to predict when the ocean freight industry will be free from all these challenges, hopefully, consumers will gradually restore pre-pandemic purchasing behaviours, and volumes of imported goods will likely diminish and help the market come out of this situation.

Moreover, the freight capacity stuck in traffic right now will open up once there are no further obstacles. Just like a traffic jam, the flow must go below normal levels for the problem to resolve itself. This could take a while. 

In the long run, governments and market players must make significant investments in port and vessel capacity along with deploying supply chain technology to prepare logistics against all kinds of challenges.

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