By Sheila Hewitt, Vice President, International, Transplace and Mollie Bailey, Director, LCB International Logistics, Transplace
As we discussed in our previous post, chassis shortages continue to cause significant issues at a number of U.S. ports and throughout many supply chains, perhaps even threatening the holiday shipping season. In light of these continuing problems, it’s time to take a close look at these issues and discuss some possible long-term solutions.
The fallout from the winter’s polar vortex continues to be a large factor in these shortages, and with another hard winter likely ahead, it’s important to consider that long periods of bad weather require a number of months for some areas to recover from imbalances and be able to handle volume increases. To top it all off, increased fees in the supply chain ultimately get passed on in the retail price of the goods, directly affecting consumers - especially if these chassis shortages continue throughout the holiday shipping season.
Because of the time it takes to source and move large equipment like chassis, short-term solutions simply aren’t going to happen easily. While market forces could change and improve the situation, in the meantime, several large importers are experimenting with their own chassis fleets to protect themselves against these issues. However, that’s an extremely expensive investment that many companies simply can’t afford!
So what can shippers do to mitigate the risk brought on by chassis shortages, in both the short-term and the long-term? Whether a company has its own chassis pool or not, there are a few important things to consider when it comes to minimizing the effect of chassis shortages:
- Creating strong relationships with carriers and other parties that manage chassis pools is key, and will help lessen potential problems.
- Building in cost and time contingencies for potential delays in the supply chain is vital, as chassis shortage issues, in addition to driver shortages, are having a compounding inflationary impact on the economy.
- Realizing that additional changes need to be made in how chassis are managed, and that technology has to be a critical part of the solution to provide universal visibility for all impacted users.
When dealing with these shortages, the most important thing to remember is to proceed with caution. Be aware of the current market situation. These shortages can and will happen again in the near future, and everyone involved in international shipping needs to be actively monitoring the situation and working with trusted partners in order to minimize the negative effects.
To take a closer look at what factors are impacting these issues and the effect they have on shippers, carriers and consumers, check out Part 1 of our chassis shortage posts, “Why Are Shortages Such a Persistent Issue?”
How do you plan deal with possible chassis shortage issues in the future?