Is there a major logistics collapse during the peak season? A review of shipping in 2021

For cross-border sellers, the two most important things are the operating conditions of platform stores and the product transportation chain. The operating conditions of platform stores are closely related to platform policies and buyer feedback, and are the foundation of cross-border sellers; while the product transportation chain concerns whether sellers can ship and deliver on time, and its importance to cross-border sellers is also self-evident. On the last day of 2021, let us take a closer look at the major events that occurred in global shipping in 2021.

Shipping review 2021

This year, the shipping industry has been full of news: Evergreen Marine's Ever Given ran aground in the Suez Canal , Los Angeles /Long Beach ports were congested , and container ships were stranded in queues at major ports ... Affected by the epidemic, the demand for imported products in the United States has continued to surge, and Asian ports are overloaded with products, seriously affecting normal operations. While many cross-border sellers hope to take advantage of the situation and make a fortune, they are also worried about the current situation of shipping. As a result, at the end of the year, sellers did not make much money, but liner operators and container ship owners made a lot of money .

1. Shipping congestion continues

Representative of "Black Swan Event": Ever Given ran aground in the Suez Canal

On March 23, the Ever Given was stuck sideways while sailing in the Suez Canal, blocking traffic in both directions for six days, and more than 350 ships were forced to anchor and wait during peak hours. Shippers faced weeks of delays and were unable to deliver goods to Europe and the East Coast in a timely manner.

Los Angeles /Long Beach Port Gridlock

This year, the United States' overall import volume has reached an all-time high. From ports to inland transportation, supply chain congestion is frequent, and the Los Angeles/Long Beach ports, which handle 40% of U.S. imports, are at the "epicenter" of congestion . In January, more than 30 ships were anchored off the coast of Southern California, and on February 1, 40 ships were anchored. By April, it exceeded the level during the labor unrest in 2014-2015.

2. Shipping prices are skyrocketing

The sharp increase in transportation demand has led to congestion in ports around the world and an increase in shipping freight rates . As freight prices continue to rise , the demand for ships in cross-border trade is also increasing, which has pushed charter rates to an all-time high.

According to shipping consultancy Drewry, freight rates from Asia to the U.S. West Coast have risen from $4,000 per FEU at the start of the year to more than $12,000 per FEU in mid-September.

(Price per FEU, blue line = 2021, orange line = 2020, green line = 2019)

Although the price has fallen since then, the fluctuation is not large and has generally stabilized. Now the price is gradually rising again.

The surge in freight rates has brought unprecedented profits to container shipping companies, from shipping giants such as Maersk to small and medium-sized shipping companies such as Zim. Drewry predicted in July that total liner shipping revenues would reach $100 billion this year. In October, it raised its forecast to $150 billion. This month, it raised its forecast again to $190 billion.

3. Holiday delivery delays

The skyrocketing shipping prices and the constant port congestion have made many sellers worry whether they can catch up with the last wave of peak season sales. Major institutions have released survey data, indicating that the shipping situation this year is indeed not optimistic, and holiday delivery delays may become the norm.

According to the latest data from parcelLab, an operations experience management platform , 41 % of British online shoppers have experienced packages not being delivered on time ; and even 39% of British consumers complained that their orders simply "disappeared."

The transportation situation in the United States is not optimistic either. Even as early as a month before the peak season begins, Amazon issued an announcement to remind sellers to prepare inventory in advance to prevent problems with product transportation during the peak season.

It can be said that all major platforms and sellers have recognized that the peak season will be a tough battle, and everyone has made preparations in advance.

Amazon sellers’ actual feedback on holiday delivery services

It is still the peak sales season. Although many retailers and cross-border sellers are worried about the delivery of holiday goods, some sellers believe that the actual situation of logistics and delivery does not seem to be as pessimistic as imagined.

Recently, when I was browsing the official Amazon forum, I noticed that some sellers posted on the forum saying that the 21-year shipping collapse did not seem to come as expected.

A seller named "Goldfinch_Books" posted: "I'm curious how everyone is doing with December shipments. The forecast for October and November was so dire that some of us were even considering closing the store to avoid a holiday fiasco. But in fact, shipping during the holiday period was very smooth for us, and all of our packages arrived a few days before the deadline . USPS is doing a great job!"

Under this post, many sellers agreed with this.

Seller A: I ship my goods through FBA and all my orders have not been delayed. During the peak season weeks, USPS has been arriving at my house around 6 am.

Seller B: We used Amazon shipping and it ran smoothly throughout the holiday with little to no problems. Things worked the way they were supposed to, and I guess I should give Amazon a thumbs up.

Seller C: The parcels I send are often delivered to customers very quickly. In general, the express delivery service and speed this year have improved a lot compared to last year.

Seller D: We are so pleased with the performance of USPS this year that we gave the Post Office a nice Christmas gift in recognition of their hard work to ensure our packages are delivered on time.

Overall, there were occasional delivery delays and lost shipments during this year's holiday shopping period, but sellers were still very satisfied with the overall situation.

Some sellers said that there are two reasons why the overall delivery of goods is good this year: one is that many retailers remind consumers to start holiday shopping early, and the other is the efforts made by major retailers and express delivery companies for transportation during the holiday period.

As early as October, many data analysis agencies predicted that there would be shortages and delivery delays during this year's holiday season. In order to ensure that consumers' favorite holiday items can be delivered to them in a timely and accurate manner, retailers warned consumers to start holiday shopping in advance, which to some extent dispersed the delivery pressure during the holiday season.

In addition, major retailers are also working to improve the shopping experience for consumers during the holiday shopping period. Amazon, Walmart, Dollar Tree and other major retail companies began offering generous bonuses to recruit supply chain workers on a large scale as early as three months ago to ensure that their distribution centers are adequately staffed during the busy holiday season.

USPS has also been preparing for holiday deliveries, including hiring tens of thousands of seasonal employees, leasing more than 13 million square feet of additional storage space in more than 100 locations across the United States, and adding 112 new package sorting machines.

"Overall, the global supply chain crisis has increased the logistics costs of cross-border sellers to a certain extent, but the overall logistics and distribution situation during the holiday period is still good." The seller "AudioFan" said that in terms of transportation issues alone, this is simply the smoothest Christmas we have had in many years.

However, the editor found that there are still many sellers who think that this year's logistics and distribution are very bad, and even caused significant losses due to logistics timeliness issues.

Has logistics affected you in 2021? Welcome to leave a message to discuss.

Shipping

Amazon