Supply chain issues explained mini-series: The Shipping Container Problem

Remember how there were over 100 ships waiting to be unloaded at the U.S. West Coasts.

Crazy times? Right!

One of the reasons for the port congestion is obvious (if you have read?my previous post?on #supplychainissuesexplained series).

To meet a backlog of U.S. consumer demand, China and other countries sent numerous ships carrying everything from furniture to washing machines to the U.S.

And as all this unfolded, Ever Given, one of the largest container ships in the world, got stuck in the Suez Canal on March 23, 2021.

Result?

A 6-day global delay in the movement of more than hundreds of container ships.

Some of these ships were rerouted,?but that didn't help the issue. It only increased the time it would take for these ships to reach their destination.

But there's another, more subtle problem that added to the brewing supply chain storm at the sea.

The shipping industry has a size problem.

You know why the ships stuck at Long Beach & Los Angeles ports couldn't be unloaded at other U.S. ports?

Because these container ships couldn't fit anywhere else!

In the last two decades, companies have relied more and more on big ships to carry freight.

The top 10 companies account for 85% of the world's total shipping capacity. And they have adopted a simple growth strategy to deliver more goods at once to get more profits.

How?

They increased the size of their container ships.

The size of the average container ship nearly doubled between 1996 and 2015.

At the beginning of the century, ships that carried 10,000-15,000 didn't even exist.

And now?

They account for 17.5% arrivals on the West Coast.

And the size problem isn't going anywhere anytime soon.

A year after Ever Given got stuck in the Suez Canal, Ever Forward (a ship by the same company) has run aground.

Although this time, it has not caused a blockage, environmental activists are worried digging out the ship might have a detrimental impact on the environment due to a potential oil spill.

And any ideas why it was stuck? Again, the "big" size issue.

The boat missed a turn, veered out of a 50-foot-deep channel that runs down the middle of the bay to accommodate such large cargo ships and then run aground.

Moreover, many of the U.S. ports aren't big enough to handle these big boats, further adding to the congestion issues.

All these issues piled up until they presented themselves as a logjam of container ships at the U.S. West Coast ports.

Ships had to wait in queues of up to 100 vessels or more for 3 weeks on average to be unloaded.

But this is just one of the many complexities that caused the supply chain crisis.

Stay tuned for?Dan Coll's next post in the #supplychainissuesexplained series to read about one of the biggest challenges the global supply chain is currently facing - a serious of shortage of talent and labor.

P.S.?Dan,?Ninaad,?Sanjay?and I have compiled a list of reasons how our supply chain broke in a mini-series called #supplychainissuesexplained. Watch out for all the posts in the series.

P.P.S Read the previous articles on the #supplychainissuesexpalined series here:

1.?Supply chain issues explained mini-series: Downfall of Production

2.?Supply chain issues explained mini-series: Lean Manufacturing

3.?Supply chain issues explained mini-series: US. China Trade War

4.?Supply chain issues explained mini-series: The Surge in Demand

#supplychainnews #shippingnews #shippingindustry #logjam #logistics