Growing container congestion in Europe has been an ongoing problem for several months. Summer labor strikes in Germany led to a pile-up of German import containers. Shippers can expect to feel the effects of this two-and-half-month back up through the rest of the year and beyond. They can respond by prioritizing agility and transparency in their supply chains.
German congestion spreads
What started as a July problem for a few German ports quickly became an August problem for the Netherlands and other nearby countries. For shippers looking to evade the congested ports, rerouting ships did not necessarily solve the congestion problem but rather moved it elsewhere. Things were the same for increasing use of rail and truck transport.
As the congestion from Germany expanded to other parts of Europe, many ports were also affected by the drought during the summer’s heat wave. In the fall, the German ports may be decongested. Still, the domino effects of the labor strike will be felt for months.
Container congestion in Europe
According to American Shipper, two-thirds more shipping containers stalled in Europe than on the East Coast of the United States. Nonetheless, container congestion in Europe begets congestion all over the world. Effects of congestion in Europe have also been felt by the Americas. The container congestion caused subsequent rail congestion, trucking backups, and slowdowns in container availability.
This is primarily due to the interconnectedness of the global economy. Some of these items in the backed-up containers included fully assembled Ford, BMW, and Mercedes automobiles. Other containers were filled with Ikea furniture and home decor. As a result, shippers working in the automobile or furniture industries have generally experienced increased delays worldwide.
All shippers affected
In general, the slowdowns have caused many shippers to fall behind schedule. Shippers have needed to check vessel availability weeks in advance. The German pile-up created a domino effect for more container congestion in Europe.
Container congestion also creates a false sense of container scarcity, which in turn causes container rates and spot rates to increase. Whether a shipper is directly impacted by the German pileup or not, they will certainly notice the inflationary effects. Ultimately, the consumer feels all this with price hikes and shipping delays.
How shippers can adapt to a volatile supply chain
Shippers should prepare for a continuously unpredictable supply chain, as container congestion in Europe is just one of many challenges affecting the supply chain this year. Supply chain managers will have to look for ways to be more agile and flexible to the effects of fluctuating traffic.
For large companies, reactive changes may come with chartered ships, while smaller teams may focus on upgrading their logistics processes. For any shipper looking for working flexible and agile supply chain models, a strong TMS is necessary.
Increase transparency with robust logistics
There are no immediate fixes to remedy container congestion in Europe. Still, shippers can adapt to the ongoing effects of inflation with logistics systems that easily compare carrier rates and regularly monitor the status of global shipments.
This kind of visibility demands a logistics platform that can manage inconsistent volume and price increases. CTSI-Global’s HoneyBee TMS™ accesses real-time data allowing suppliers to find the best rates and delivery quality while also sustaining long-term relationships with a network of vetted carriers.
If you’re not feeling the effects of container congestion yet, you will soon. Contact CTSI-Global today to discuss how you can prepare for inflationary changes to your supply chain.