By Arthur Chen   Photo：mohamed_hassan，Link：pixabay

The current market strategy to retrieve empty containers back to Asia, respectfully China, in the fastest way by most steamship lines are limiting the space of IPI ( inland city ramps in the US & Canada). Only less than 10% chance to get confirmed IPI space among whole bookings; however, it doesn’t mean good luck to you. The IPI ramps in the US have been in severe backlog even when over 150 million people have vaccinated and logistics labor have return to work over months. It looks not just only labor caused laden containers stuck in seaport docks, railway hubs and inland ramps but all service providers including ports onsite facilities, drayage and railway capacity, pick up trucks etc. in whole supply chain have not yet released the normal full range in operation.  It just like the traffic accident occurred in the morning 7 am on freeway which made 3 miles traffic jam in queuing up to get out the exits need to have over hours to make traffic back to normal. It is more or less like current ocean container transportation in every conners in the world.

To recover the heavy backlog in every port yards, ramps, hubs, it may take over months to make it happen but the worst thing afront of the containers movements has come up earlier than normal.  High consuming demand in North American and Europe has come one month earlier than usual peak season. It is created by large demand after post-pandemic time.  The averaging inventory in stock since outbreak till now just only stands on 35% level.  Importers need to place a huge amount of purchase orders to meet up the following sales activities such as “Back to School sale”, “ Summer vocational sale” and all kind of parties/events no matter outdoor & indoor after lock down opened. This is just like a serial car accident popped out in the freeway one after one then you can easily figure out the hours shall take double or triple times to get road back to normal function. Yes, it is the bloody truth now speaking of ocean transportation.

To stop moving IPI containers became a “must-do” trick to ease possible accumulated volume onto rail hubs and IPI ramps so that to leave sufficient time for those facilities “digesting” the backlog matter. Why did I say it is a trick ? Most containers still have to move to inland cities no matter what. You can’t have those containers stay at coast area to sell to the people in Dallas, Chicago etc.. Ocean lines terminate most containers in ports on coast, but these containers still need lots of trailers to move to inland cities. It creates another tough issue of serious shortage of trucks, tailers which provide transloading service from coast area to inland cities. It is burning another fire in the tough ocean transportation too.  Needless to say, the ocean lines take advantage of cutting off IPI space and raise up the ocean rate to coast ports 10% up to 30%. This trick in one way can save high cost in railway hauling to IPI ramps and in another way bring in additional profit by raising up rate to coast. No wonder all containers ship lines have created the profit since 2020 to now be 7 times than past 10 years. 

Based on the critical practice in most ocean lines restrict IPI bookings, we, as freight forwarders which is also playing vital role of the service provider to supply chain management, are even crucially reliable parties to provide clients transloading by trailers onto final receivers door. More and more clients are enjoying to receive this kind of intermodal transportation by Sea/Truck multiple all way get to IPI ramps and after we calculate whole cost from Asia “To Door” of final destination in current market situation, the rate is even cheaper than apply for ocean freight rate from Asia to US IPI ramps.  Ocean carriers don’t care about the interest of those distributions not located in sea coast but the service providers to supply chain management have to bring up solutions to assist final users. It is a giant gap in between Ocean liners and NVOCC/Forwarders which also the strength and reputation that ocean liners would never beat up NVOCC/Freight forwarders.