The last year has been an experience we’d all like to forget but will always remember. For supply chain professionals who depend on importing and exporting, the word unique just isn’t enough. COVID, port shutdowns, blank sailings, port congestion, container imbalances plus added surcharges equal the most challenging year ever experienced. What’s on the 2021 horizon?
Importers should keep an eye on the following:
- Expect more of the same the first quarter of 2021.
Plan shipments as far ahead as possible. Vaccine and PPE shipments will get priority service. Rates are expensive all around, so shopping around isn’t going mean a deal.
- Carriers will be aggressive.
Expect carriers to pull space if volumes do eventually drop considering the pressure they will get from importers and a few governments that have the alliances in the cross hairs.
- Chinese New Year can’t be ignored.
The 2021 holiday is Feb. 12 and typically is two weeks. Traditionally delays shipments due to shutdowns as workers taking time off with families.
- Consider the impact of the weather on an already tight supply chain.
Past years have proven Mother Nature is in control. From a Polar Vortex to major snowstorms, unexpected delays should be considered during planning.
- Look for stabilization of ports by the middle of second quarter at earliest.
Containers should balance, and shipments should begin to recover.
- Plan for high costs.
Budget for continued shipping costs. There’s no relief in sight for 2021. With the new alliance structures, now carriers know how to manage capacity to keep space tight.
- Consider Warehousing options if stocking up on inventory.
Preshipping goods and materials is always a great strategy if there’s a place for storage.
- Airfreight rates will stay high.
This is especially true with vaccines entering the heavily saturated market. This is a wait and see situation with the new administration being sworn in Jan. 20. It’s too early to predict what might happen. In an early December interview, President-elect Biden said he’s not going to make any immediate moves until there is a full review of the current U.S. policy on China.
Exporters should watch for the following:
- Change to rates and capacity.
U.S. exporters benefited from heavy import volumes in 2020. With plenty of imports, there’s been pressure on rates to stay low. There will likely be upward pressure on rates and capacity as the supply chain in the United States balances by mid 2021.
While talks continue, the date to exit remains Dec. 31. Expect implications related to how the EU manages routes and services.
- UK disruption at ports.
There is growing concern among industry, ports and shipping sectors of significant barriers as the EU and UK struggle with new customs routines and systems. While some are saying contingencies are planned, only time will tell.
- Asia should remain steady.
Expect the purchase of U.S. manufactured goods to remain unchanged.
- Impact of the new administration in Washington D.C.
As noted above in the imports section, it’s a wait and see related to how the Biden administration review and subsequent decisions will affect exports.