The global supply chain crisis: understanding the shipping delays from Asia

Since the start of the COVID-19 pandemic, the global supply chain has been under immense pressure. One sector that has been particularly hard hit is the supply of hygiene products, which has experienced significant shipping delays from Asia. This blog post looks at the current state of shipping delays, container issues, increasing waiting times and the reasons for rising prices and delays. We’ll also make some predictions for the end of 2024 and recommendations for hygiene buyers.

The container crisis in 2023-2024

The container crisis, a major factor in the disruption of the global supply chain, continues in 2023 and 2024. A number of key factors may be at the root of these problems:

1. Persistent imbalance in container distribution: despite efforts to rebalance, containers remain unevenly distributed. Many containers are still stuck in North America and Europe, leading to bottlenecks in Asia. The situation has not improved significantly, and Asian producers continue to face serious container shortages.
2. Persistent port congestion: major ports, particularly in the United States, continue to experience severe congestion. Ports such as Los Angeles and Long Beach are particularly hard hit, with ships having to wait a long time to be unloaded. Labour shortages, partly due to ongoing outbreaks of COVID-19 and strict quarantine measures, are exacerbating these problems.
3. Logistics challenges: The logistics sector is struggling to adapt to fluctuating supply and demand. Shortages of truck drivers, dockers and warehouse staff remain commonplace. Disruptions in intermodal transport, where goods are transferred from ships to trucks or trains, are further slowing container movements.

Increased waiting times

The container crisis has led to a considerable increase in waiting times for shipments of hygiene products from Asia:

1. Port bottlenecks: ports are facing major bottlenecks, with ships having to wait longer to dock and unload. These delays disrupt schedules and affect both ships in port and those travelling to port.
2. Capacity restrictions: The shipping industry operates at capacity, leaving little room for additional demand. Any disruption, such as a COVID-19 epidemic or natural disasters, has cascading effects that further delay shipments.
3. Strong demand for hygiene products: The pandemic has led to continued strong demand for hygiene products such as hand sanitisers, masks and disinfectants. This surge in demand puts additional pressure on an already stretched supply chain and contributes to delays.

Reasons for the rise in prices

A number of factors explain the spectacular increase in the cost of delivering hygiene products:

1. Container shortages: container shortages mean that shippers pay a premium to secure containers. Shipping prices have soared, with some routes seeing a tenfold increase in costs.
2. Increased operating costs: delays lead to increased costs, including demurrage (charges for keeping containers in port beyond the agreed period), extra fuel for waiting ships and overtime pay for port workers. These costs are ultimately passed on to consumers.
3. Inflationary pressure: rising fuel costs, increased demand for goods and higher prices for raw materials and manufacturing inputs have led to inflationary pressures that drive shipping costs even higher.

Recommendations for buyers

Given the current situation and future forecasts, buyers of hygiene products should consider the following recommendations:

1. Buy in advance: To avoid potential disruptions and price spikes, it is advisable to buy hygiene products in advance. This strategy ensures that you have the stock you need when you need it, and reduces the impact of shipping delays.
2. Stockpiling: Maintaining adequate stock levels of essential hygiene products can act as a buffer against supply chain disruptions. This approach is particularly important for companies and institutions that depend on a constant supply of these products.
3. Diversify suppliers: Consider diversifying your supply chain by purchasing hygiene products from several regions. This diversification can reduce reliance on a single source and mitigate the risks associated with regional disruptions.
4. Monitor market trends: Keep abreast of market trends and potential disruptions. Regularly reviewing supply chain conditions can help you make timely decisions and adapt supply strategies as required.

Conclusion

Shipment delays from Asia in 2023 and 2024 illustrate the continued fragility of the global supply chain, particularly when it comes to the supply of hygiene products. While the challenges are considerable, they also present an opportunity to rethink and strengthen supply chain strategies. By buying in advance, maintaining stocks, diversifying suppliers and observing market trends, buyers can better manage the complexity of today’s supply chain landscape and ensure a constant supply of essential hygiene products.

Do you have questions or need help with hygiene procurement? Contact our team for personalised advice and find out how to optimise your supply chain strategy. We’ll help you avoid future disruptions and always be fully prepared.