Peak shipping season is looming. The Delta variant continues to cause major disruption to manufacturing & logistics capacity worldwide. And with Chinese New Year on the horizon, the outlook for global logistics channels remains challenging, to say the least.
As we sail towards 2022, we consider the biggest issues faced by businesses shipping goods out of China (& other Asia Pacific markets) and offer some practical advice on how to prepare for a stormy year ahead.
Current Sea Freight Situation - The vast network of ports, container vessels and trucking companies presents an extremely complex logistical landscape at the best of times. After 18 months of the Covid19 pandemic, costs continue to skyrocket and shipping channels from the Far East remain severely disrupted and getting worse.
The shortage of workers due to continued COVID 19 outbreaks has led to regular port closures and factory shutdowns. These closures have a direct impact on other ports and cause container shortages, back-logs & bottlenecks, with vessels regularly re-directed to alternative ports, sometimes even in different countries.
Current Air Freight Situation - The knock-on effect of this disruption at sea is that air terminals are receiving large amounts of freight. Due to the high demand, prices are increasing and space is extremely limited.
Some airports are also being closed due to Covid19 - for example, Shanghai and Nanjing Airports in China were both shut recently due to new outbreaks of the Delta variant. As capacity is stretched, terminals are congested and freight times have increased.
This situation is global and ongoing - we don't anticipate sustained improvement until at least April 2022.
What can we do to mitigate these issues?
Here's some simple recommendations to consider which will help to keep goods manufactured in the Far East moving into markets around the world:
- Add an 8 weeks buffer to each promotion if goods are being sent by sea. Add 6 weeks for air freight.
- Ask for Sea Freight & Air Freight costs up front to ensure budgets are accurate.
- If possible, build some contingency (up to 40%) into your budget in case air freight is required.
- Do not leave anything to chance and don't rely on the usual shipping schedules and costs.
What about Chinese New Year?
Chinese New Year has an impact on Far East production and logistics every year, but 2022 is set to be extremely challenging. Here's what you need to know if you're preparing marketing activations for the upcoming year:
- Factories will close from mid Jan until mid Feb 2022
- If you need goods delivered between January & April 2022, consider ordering in September 2021 at the latest.
- Shipping rates will peak between January & February 2022, so if you have goods being shipped from China during this period, be prepared to pay a premium for both Sea & Air Freight.
- 2022 is a FIFA World Cup year, so factories manufacturing promotional merchandise for the event will be at capacity for much of the year.
- Don't worry, ASL is here to help! Read on to see how we're helping our clients to navigate the storm...
How Can ASL Help?
ASL teams have the knowledge and expertise to help guide you through the challenges ahead:
- We're already exploring alternative, local market manufacturing capacity through our extensive global supply chain, to relieve pressure on Chinese factories and cut down on shipping times & costs.
- We don't use third party sourcing agents. All Far East orders are managed directly by our sourcing teams in Hong Kong & China, who are in constant contact with manufacturers across Asia Pacific.
- ASL's sourcing team also has direct, well-established relationships with logistics providers in the region, helping to identify the most effective shipping solution for every consignment.
- We keep our clients updated with the latest news (good & bad), advise on major changes and offer alternative solutions wherever possible.
Although the situation remains difficult, we're here to support our clients and ensure their marketing activations run smoothly into 2022 and beyond. If you want specific advice about Far East production and shipping, we can help. Contact us to discuss your particular requirements.
#logistics #fareastmanufacturing #shipping
