Infrastructure seems to be a big word nowadays but it’s really a simple term. It’s Latin and it means under or below. Bridges, Railways, Roads, Highways, Sea Ports and Airports are some examples.
Our President is pushing for infrastructure package but unfortunately only 5% is actually going to bridges, roads and sea ports – things that we commonly understand as infrastructure. As the trans-Pacific imports increase our infrastructure cannot handle the loads. January showed an increase of 10%, February hit 13.5 % and March grew to 51% compared to 2019.
Infrastructure is important in the shipping industry because it helps efficiently move cargo from one point to its final destination. It’s frustrating when we can’t move our goods out of the port fast enough. That’s why you need to choose your port carefully! The number of container ships stuck waiting at anchor off Los Angeles is down to 20 per day. It used to be 30. Read here what Port Houston in Texas is doing.
For example, if a ship off loads 10,000 containers then you need the trucks, cranes and the transport systems to move those containers off the ship, move it out of the port and onto the road.
If the highway is already congested and you add thousands of trucks and containers they’re just going to wait in traffic causing more congestion, pollution and indigestion. Another reason for delay is the congestion factor at our ports. See the article here. The only way around this is to ship by AIR and we all know what that co$t is !
Even though containers are scarce there are alternatives. Call us to discuss LTL and other routes thru the Panama Canal to Colombia, South America. We can then re-route your LCL back to the States. This costs more but you’ll get your cargo. It sure beats waiting 6 weeks or more just to load for a direct booking! Yes, you read this correctly. We are at 6 weeks to load a direct booking (Asia-West Coast). May 2021 will probably be the worst as the backlog is occurring in China as well. Both ends are getting clogged.
Infrastructure is very important from digging out the ports so they can handle bigger ships as well as widening roads and strengthening bridges to support the loads. If you recognize this photo then you understand exactly what we need if we travel under this bridge. You can’t go under that bridge with much more than a gondola ! Never mind the container ship. The same applies to a container ship – it needs deep port waters.
Infrastructure takes years to rebuild and plan properly – I’ve been in meetings about infrastructure and they take years to realize. It ranges from urban planning, DOT regulations for road systems, bridges, ports, traffic control and of course logical layout of intersections and exits. Did I mention traffic control systems? Oh – Red Lights – yes ! Ever been on the road when the traffic lights are down? It’s absolutely FRUSTRATING. Well, get ready for a lot of red lights in regard to shipping via ocean.
So when you hear infrastructure, remember the two words infra meaning under or below and structure – you got it – under the structure ! Under Control – It’s what supports the economy, its growth and its people. It’s like underwear – it supports us. You can get by without it, but it isn’t comfortable !
Right now we’re seeing unprecedented shortages of commodities like building materials, lumber, OSB and so forth. The construction industry and its contractors alike are struggling to get materials. They are UNDER (infra) stress. If you see a contractor – thank them. They are trying to earn a living too.
It’s not so much that we cannot get the products. It is that we cannot get the product shipped here because we are heavily reliant on overseas manufactured products in CONTAINERS. Another issue is that there is a shortage of empty containers to load those goods from overseas. See our previous article on this topic. The recent incident with the Suez Canal has exacerbated an already overloaded situation. The Ever Given caused enormous delays. We are estimating over 6 weeks to return to normal. Coupling that with the higher demand in the USA and you’ve got a long line at the deli waiting to be served your cold cuts – or loading a container in this case.
Today, was interesting as I had conversations with clients from four different countries from Africa, Asia and 2 in Latin America. From COVID to shipping delays – there is always something happening. Clients want their goods and can’t wait 2 months or more (if you’re lucky!) Our infrastructure or what’s underneath is what really supports us from a logistics perspective.
If you’ve lived overseas and/or have visited any third world country then you understand what the word infrastructure means and how it affects the economy, shipping and logistics. Without good roads and bridges it’s a nightmare to travel period. I’ve lived overseas. When I arrived back home, I appreciated the good roads !
In regard to the calls concerning moving goods from around the world… My best advice during this time is fasten your seat-belt. You’re in for a ride. Your best friends will be those that have knowledge of shipping and can be forthright with you about realistic transit times. Containers are like Gold now – Valuable and hard to come by.
This year Asia-West Coast contracts are up over 30%-50% higher compare to last year. Fixed-price increases are just over 100% for the Asia-West Coast route and near 75% for the Asia-East Coast trip! Containers for the direct routes from Asia are almost all sold out through the end of the year. May is booked.
As of last Friday, the spot rates (Freightos Baltic Daily Index) are about $5,000 for a FEU (Forty-Foot Equivalent Unit) for Asia-West Coast and over $6,300 for Asia-East Coast. Unfortunately, even at those rates, you’re not guaranteed a container !
Again, plan ahead and anticipate. Remember this song Anticipation by Carly Simon in 2009? Anticipation ! These are the good ol’ days !
Plan ahead and make sure you duck when you go under the bridge, unless you’re in Venice, Italy in a gondola. Sounds like a great idea about now – anyone game? After this pandemic…you can finish the sentence.
Contact us if you need advise. We’ll help you anticipate and deal with the infrastructure so you won’t be infra-strated. Remember, these days are stressful, so keep close to your family and loved ones. They are your infrastructure – They support you and you can uplift them !