What, then, do port workers, the Suez Canal blockage, domestic goods, and you have in common?

Container shortages. Though there are near 200 million containers, no new containers are being produced, and most of needed containers are full, sitting and waiting in one location rather than being unloaded and sent to another to be re-used.

No doubt, container shortages are at crisis levels with an impact that’s both far-reaching and potentially devastating for supply chain.

Such consequences include:

• Exponentially higher shipping costs
• Monumental shipping delays
• Extreme short-term supply shortages
• Potential long-term scarcity of high-demand goods
• Consumer stockpiling that leads to skyrocketing cost of goods

Without a doubt, container shortages are a global crisis that’s yet to be resolved. What will help? Time, of course. As well as being proactive in taking countermeasures to combat the crisis.

Logistics Countermeasures

1: Book with freight forwarding. We’re not waiting for the “open” rush to book containers. Instead, we’re booking now and including freight forwarders that are, at a minimum, 4-6 weeks out.

2: Escalate to the U.S. team. China is being hit the hardest, so we’re leveraging our national team to help push for more containers.

3: Prioritize, prioritize, prioritize. A phased approach based on the priority of critical/hot parts allows us to maximize what little available containers there are.

4: Send containers to multiple suppliers. Diversifying our available containers across multiple suppliers allows us to fill those containers with the most-needed parts for our clients.

Planning/Supply Chain Countermeasures

5: Trust and verify. In times of crisis, reliability means everything. We’ve implemented a boots-on-the-ground production confirmation process that requires our origin teams to inspect and authenticate everything.

6: Communicate regularly and without fail. We hold a weekly meeting between our headquarters and our origin teams to review adherence to PO due dates.

7: Manage POs diligently. Staying on top of everything means daily PO management – a best practice even without a crisis.

8: Coordinate priority parts. Our teams are actively involved in helping determine the who, what, when, where and how of hot/critical parts.

9: Rank container loading by priority. Hot/critical parts are given priority based on our client’s need.

10: Arrange for alternate freight on priority items. Reduce lead time on hot/critical or spike items by using fast boat containers and air freight.

11: Allow for margin. We include an additional two-week safety stock buffer to account for potential transportation delays.

12: Align lead times. Updating lead times in our Planning MRP system allow us to match new and extended transit times with projected ones.

13: Plan and predict sales. Upgraded forecasting software means we can predict anticipated sales more accurately, thereby, predicting shipping more accurately.

Like us, don’t let crisis lead to inaction or panic. As they always do, this trying time will sort itself out. In the meantime, empower yourself by creating a workable plan of action and executing it with precision. That’s what we’re doing at MES with our pivot strategy to help stay the course if and when the crisis passes. Need help or want to learn more? Contact us.

Sources:

1 https://www.latimes.com/business/story/2021-01-20/covid-surge-hits-la-ports-increasing-need-for-vaccines

2 https://www.governing.com/work/covid-19-surge-could-shut-down-major-california-ports.html

3 https://www.businessinsider.com/toilet-paper-coffee-products-delayed-suez-canal-blockage-impact-2021-3