It’s always interesting to hear what Ryan Petersen of Flexport has to say about trade. In addition to being a top executive in the shipping 3PL arena, he’s often an astute economic observer.
And he’s echoing a refrain lots of ocean shipping customers are singing. Predictability and sticking to schedules is very important. How many times do ocean carriers have to hear the message?
This extremely interesting article details what’s happening at the Panama Canal in terms of ocean shipping trade. I learned a lot from it.
For instance, containers are a small part of the trade through the Canals, both the Panamax and NeoPanamax (deepwater, for the larger ships) routes. The largest part is bulk, grains, coal and oil and LNG.
And the majority of the trade in 2020 is Pacific to Atlantic, not Atlantic to Pacific.
Since there’s a lot of export of these commodities, particularly agricultural and oil-based, from the Gulf Coast of the US to Asia, Canal traffic is a good measure of US international trade of these.
Altogether a good read.
Greg Miller, Senior Editor Thursday, October 15, 2020
Here is an example of the adversarial approach to overbooking. Felixstowe has had serious problems handling cargo over the last several months. Port management is blaming it on everyone but themselves. Ocean carriers are avoiding the port or canceling visits, or cutting and running without fully unloading cargo; truckers can’t get slots to pick up or deliver; and customers are unhappy with the ability to get their cargoes delivered through this port.
I don’t know anything about the actual situation, except what I read. But when there’s poor performance, overbooking is one of the responses to expect from customers. YOu look to game the system to be able to get what you need when you need it, and rely on canceling to avoid payment. It happens everywhere. To me, it’s more a symptom of a broken system than a ‘crime’ to be punished.
I think it’s probable entirely too little time was invested in finding out what some of the customers (users) needed from the system, and when it was developed, not enough attention was paid to making sure the prospective users were able to see its advantages. When you don’t work with users closely and cooperatively, they won’t see how the system can help them.
I’d tell management, fix the problems with the system. Make it fair to all, and make sure you understand participant motivations so you can prevent gaming. Because if there’s a weakness, there will be gaming, for sure.
Supply Chain and Logistics 