Navigating the Waters of Global Logistics: The latest updates

In March 2022, we shared insights about the state of the global supply chain crisis. As we move through 2024, it's time for an update. The logistics landscape continues to evolve, presenting both challenges and opportunities. At Dekkers, we are committed to keeping you informed and ensuring smooth operations despite global disruptions.

Current Challenges in Global Logistics

November 2024 update
Since our last update in July, we’ve gained valuable insights into navigating today’s complex logistics landscape. The good news? Our early booking strategy and consolidated shipment efforts have proven successful. We’ve observed an intriguing trend: the demand for 20-foot containers has surged, making them considerably more expensive compared to 40-foot alternatives. This reality underscores the necessity of careful planning and exploring shipment consolidation whenever possible.

Effective communication remains key. By maintaining open lines with our teams, suppliers, and especially our valued customer, we can navigate delays more effectively. When challenges arise, everyone stays informed, ensuring that no one is caught off guard.

Looking ahead, we anticipate a busy few months as the holiday season approaches and the Lunar New Year starts early on January 21, 2025. We’re already detecting potential price increases for shipments to Europe. Our approach remains steadfast: book early, adapt with flexible transportation options (including rail and air when needed), and keep you updated on your shipments.

We expect supply chain pressures to ease by spring or summer next year, although we’ll continue to monitor global developments that could impact operations. Until then, rest assured that we’ll keep prioritizing planning, flexibility, and transparency, ensuring you’re informed every step of the way.

Navigating the supply chain disruption
The ongoing disruption in supply chains is a major challenge. The aftermath of the COVID-19 pandemic, combined with geopolitical tensions and trade conflicts, has resulted in unpredictable supply chain situations. Shortages of raw materials, labor problems, and transportation bottlenecks are widespread, impacting the timely delivery of goods.

One of the results of these supply chain disruptions is a severe shortage of containers. This scarcity is causing a ripple effect across the entire supply chain, resulting in increased prices and extended lead times. The Red Sea crisis triggered a congestion problem of significant proportions. Container shipping companies in the Asia-Europe trade reroute via the Cape of Good Hope to evade Houthi attacks, extending transit times and straining container capacity. Transit times between ports in Asia and Northern Europe have increased by an average of 15% and between Asia and Mediterranean ports by 39%. (according to Sea-Intelligence statistics)

Cargo volumes from China rebounded early in the year. This change altered the supply and demand balance. Many containers have ended up in the West and have become empty. However, they are now most urgently needed in Asia.

We expect this issue to last for at least the next four to five months. It may last through the holiday season. Why such a prolonged impact? We are almost at the end of the year. Many companies are already shipping their Christmas stock. This surge in demand is causing significant congestion at ports and on vessels, further exacerbating the container shortage.

Our approach to the global supply chain crisis

In response to these challenges, we've implemented several strategies to mitigate risks and maintain efficient operations:

Early Bookings: We're securing vessel space as far in advance as possible.
Strategic Planning: Our production teams are working closely with logistics to forecast space requirements accurately.
Consolidation: Where feasible, we're consolidating orders into full container loads to optimize space and reduce the risk of shipment delays.
Flexibility: We're exploring alternative shipping methods, including rail and air freight, when sea freight options are constrained.
Enhanced Communication: We've intensified our communication with both forwarders and clients to ensure everyone is informed about potential delays or changes.

To stay ahead of potential disruptions, we're utilizing advanced tracking technologies. These tools allow us to monitor vessel movements and shipment statuses in real-time, enabling us to make quick decisions and keep our clients informed.

Looking Ahead

Let's be honest - the logistics landscape will remain challenging for the foreseeable future. We're anticipating continued pressure on prices and ongoing congestion issues. But rest assured, we're not just waiting for things to improve. Timely and efficient logistics are crucial for your business. While global factors may be beyond anyone's control, every effort is being made to minimize disruptions and deliver your items as promptly as possible.

Keeping you informed is a top priority. Expect regular updates and know that all available options are being explored to meet your needs. Navigating this evolving logistics landscape requires understanding and partnership.

We are dedicated to providing you with the tools, information, and support necessary to make informed decisions and better prepare for the future of global logistics.