Navigating Bottlenecks
Apr 25 2019

Navigating bottlenecks

All roads lead to Rome, as the saying goes. For shippers and their logistics providers this is a useful maxim to remember when the direct route for their goods is experiencing problems.

In the winter of 2017/18, importers of goods from Asia found the going tough. A combination of severe weather conditions and rail access issues produced delays of six to eight days for cargo moving through the port of Vancouver, with on-dock dwell times of rail cars at the port averaging five to seven days during March. Container dwell times at the port of St Rupert reached four to six days before Chinese New Year.

The 2017 peak season also produced serious challenges for companies that were moving freight by air. A surge in volume that caught airlines and airports by surprise resulted in lengthy delays at major gateways like Frankfurt or New York’s Kennedy airport.

Supply chains are vulnerable to disruption, and their growing complexity has increased that risk. Surges in traffic, escalations in labor disputes or severe weather conditions can clog up hubs and snare up traffic.

A good logistics provider monitors developments continuously and identifies potential bottlenecks and viable solutions to deal with those. While some disruptions strike at little or no notice, other problems can be spotted in advance and plans developed how to deal with them.

After the 2017 peak season many forwarders moved early in the following year to shore up sufficient capacity, while airlines and handling companies took steps to beef up capacity. Forwarders also took the additional step of identifying alternative routings to avoid possible bottlenecks.

In extreme cases cargo may have to be shifted to a faster mode. Lengthy delays of ocean containers at West Coast terminals have prompted companies to divert shipments to airfreight. However, this scenario is rare, notes Maureen Samit, branch manager of Rodair in the company’s Montreal office. Such a shift usually only comes into play in an emergency, such as a temporary shutdown in production, she says.

A more frequent response to supply chain hiccups is to re-route the cargo through another gateway. Maritime imports from Asia typically flow through the West Coast ports, but sometimes Rodair uses Halifax to avoid delays. This adds 5-7 days in transit time, but it can be quicker than the original routing if the delays are factored in, Samit points out.

On the airfreight side tight capacity and congested gateways during the past two years prompted some forwarders to move cargo over smaller alternative airports. Cargo airports like Rickenbacker in Columbus or Liege in Brussels have attracted a growing volume of freighter in recent years. In Canada some importers have looked to move traffic through Hamilton, which has regular freighter service.

Some routings can be quite creative. To avoid capacity bottlenecks and congested gateways on transpacific routes from Asia, forwarders have used European airlines instead to reach North American markets. Airlines strive to gain network effects to ensure good loads. As airfreight capacity from Canada to Europe usually outstrips demand (owing to a preponderance of imports), many European airlines are happy to accept shipments headed from Canada to Latin America, moving back and forth across the Atlantic – at rates below the cost for direct shipments or through the US.

For the most part, though, a good forwarder manages to move cargo without much re-routing. “We monitor developments closely, and we work closely with the steamship lines,” says Samit. Good relationships with carriers and customers still matter in this business, she adds.

Communication is key, she emphasizes. “We keep on top of what’s going on in the market, and if something does come up we inform our customers what options are available,” she says.