Unexpected shipping costs and delays
Many shipping delays are very sudden and very unexpected, something no one can predict or plan about. Some issues can be planned accordingly to avoid delays, such as rainstorms, public holidays, etc. In this year, 2021, and the previous 2020, we have faced a very unusual problem such as the Coronavirus. Coronavirus has caused a lot of shipment delays due to restricting travel opportunities because of cities shutting down. This problem was caused mainly by international shipping.
During the first half of 2020, demand for most goods cratered as economies worldwide went into lockdown. Shipments through ocean carriers were canceled, the capacity of manufacturing goods was cut, and workers were displaced everywhere due to lockdowns. But by late 2020, real problems were faced in the supply chain processes. From a logistics perspective, the restarting of the manufacturing machine after a lockdown of quite a long period turned out to be quite difficult, resulting in a complex system responsible for moving the raw materials and finished goods around the globe. This requires predictability and precision, which had been lost due to the pandemic resulting in global shipping issues.
What are shipping delays and their causes?
Shipping delays or freight delays are usually caused when your shipment arrives after the assigned date your shipment should have arrived. These delays can be arriving an hour late, after a day, or many are one week or even a month depending on the environmental or personal situations. These situations can be due to several reasons depending on the causes of these delays. Let's go through the several reasons for delays.
Reasons for shipment delays
Shipment delays are caused due to several reasons. These can include:
1) A Large number of orders
One of the reasons for delays is when your supplier takes in many orders along with yours. This act causes delays in your order because your particular order is no longer of priority.
2) Labor Shortage
Your supplier needs to have an appropriate amount of labor to deliver the goods on time and safely to their required destination to deliver the shipment. Labor shortages can usually cause the shipment to delay because the orders need to be offered at various locations; you would need the right amount of labor to deliver the goods on time.
3) Cash flow issues
Some suppliers may face cash flow issues such as not having the funds to afford their logistic systems. These suppliers then feel the need to outsource services from smaller suppliers to deliver the goods. These small suppliers may cause shipment delays due to not having appropriate resources available to ship the products on time or may prioritize their customers rather than the customers of an outsourced business.
4) Increased Prices of Raw Materials
Some shipment delays are also caused by production delays, i.e. when the goods are not produced at the right time to be delivered. These production delays are usually caused by not having the raw material present or available at the moment. This may occur due to the higher costs of raw materials in the market. In such situations, the suppliers wait for the prices of raw materials to go down before the production process.
5) The process of dealing
Usually, dealing with the trader, i.e., your supplier, is a process where you would require communication with more than one party. This consumes plenty of time dealing and negotiating with your trader resulting in the delay of your shipment.
6) Environmental or climate issues
The shipping process is also delayed because of climate situations such as a typhoon hitting your city, heavy rain at your supplier's city or your city, or even environmental issues such as n earthquake, which may result in a delay in your shipment.
7) Electricity issues
Some cities face electricity issues regularly, or some might have a sudden outage of power. In these situations, the production process may meet a slow down resulting in a delay in producing finished goods. This flowers down the overall process resulting in late delivery of goods, i.e., shipment delays.
Shipment delays issues from China in 2021
Shippers are facing problems and are complaining about delays and the unevenness of the supply chain as the shipping lines ports. The shippers are struggling to manage against the increase in volumes and external challenges to their operations resulting from the recent outbreaks of new variants of the pandemic. Experts are warning the delays will rise again, increasing the transportation costs that will be faced by retail operations as new threats. Many Chinese manufacturers don't have as high standards and a reputation as the German manufacturers. USA, Europe, or Asia have also faced this issue at some point and are likely to face in the future for having delays in their order deliveries. It is quite natural for the buyers to talk and complain about this issue; some buyers have accepted these issues and try to keep a 10-15 days buffer for late shipment when dealing with the Chinese suppliers, while others are still looking forward to an appropriate solution. You can also use the sample concierge services to review and compare samples before placing an order with any Chinese supplier.
When doing international business, many have realized that it is not quite possible to deliver the products on time as mentioned in the sales contract. Many sudden or unexpected situations can come up, which can lead to shipment delays.
Some issues faced by suppliers such as weather conditions, lockdowns (in case of Coronavirus), or even custom delays. To avoid these situations, it is highly important to find alternative solutions as buyers when being a part of international shipping. In 2020, Coronavirus was at its peak, which resulted in cities lockdown down and logistics halt. In 2021, we still live within the pandemic era, which should be a sign that we need to handle things differently. One of the greatest solutions we can come up with is having a buffer period between the order delivery date and the actual date you need to manufacture goods.
Due to the pandemic, there have been several issues going on in the supply chain, as mentioned before. Some of these issues are:
1) Reduced air freight capacity along with soaring rates
Most airlines have dismissed 90% of their passengers' routes and are only operating barebones flight schedules globally. This has caused the rates to dramatically increase, resulting in higher costs for businesses to use air freight. To counter this, keep some kinds of operations running so that the costs can be covered.
2) Mail Slowdown Globally
The flight suspensions due to the Coronavirus have also brought an impact on global postal services. Many Postal Services have informed their counterparts in other countries, stating that the services are experiencing significant difficulties in receiving or sending letters, parcels, or express mails to various parts of the world and regions due to suspended foreign and national postal services. Some of the postal services have also experienced unavailability of transport which had been causing problems in the shipment of goods from one place to another.
3) Reduced Courier Capacity
Many couriers have been affected by the pandemic due to route suspension due to government restrictions from places with a higher outbreak of the virus. Courier companies such as the UPS, FedEx, and DHL have all reported several route suspensions as well as delays on most routes resulting in having all suspended signature-on-delivery services and delays in shipments.
4) Ships in Quarantine
Ocean freight is usually quite independent of accounts for the bulk of supply chain shipments. The Yangtze remains to be an important internal waterway for China, running through Wuhan. The effect of Coronavirus has been significant, causing an unprecedented number of black sailings on ocean freight. Almost every good from the world is shipped by sea, but shipping through the sea is set to take a downfall if the demand drops, and countries put tough measures against the Coronavirus in place. Some counties also rejected the thought of any shipment by sea from china at their country's port.
Problems caused by shipment delays
The shipment delays can cause a huge problem to businesses that would want things to work according to the right scheduled plans. Both customers and businesses can face issues resulting in a bad reputation of the shipping supplier, or in the customers' eyes, you lose customer loyalty.
How to avoid these issues?
To avoid problems like delays, several steps can be taken to ensure delivery of goods arrives on time. These include:
Automating your warehouse systems:
Softwares are usually a faster and the most reliable way to conduct any process effectively. Using automated warehouse systems can reduce the chance of errors made and speeds the overall process. Speeding up the overall process results in the goods being sent out as soon as your customer orders them. This particular act encourages Order management.
Maintenance of Inventory:
It is essential to look after the real-time inventory and constantly update it as per customers' current demands. As mentioned earlier, prices of raw materials can increase, causing a production delay. Therefore it is vital to avoid delays in the production process by keeping the inventory in check so that when the customer places an order, it is not out of stock.
Use a fulfillment service:
Suppose if you have your main headquarters in new york, sending the orders out from new york to part of the USA can be very time-consuming to deliver. In this case, you can use your warehouses located across a particular region, i.e., having your warehouses in the southwest, northwest, and east coastline, making the process of delivering the goods at the appropriate time and to the right customer.
Plan and stay organized:
Plans make everything well organized and up to date. Suppose you have a huge sale coming up or a holiday season like Christmas; you must have the necessary number of inventory or shipments ready before the public holidays therefore order management is very important. In case of a sudden system breakdown, you must inform the customers through an email or message confirming a new shipment date.
How does a shipment face unexpected shipping costs?
Unexpected costs are not usually noticeable when shipping a large order. Many suppliers fail to find out the prices, which is making the whole process of shipment expensive.
Some of the unexpected costs are the increase in shipping costs because the recent trade war has brought an increase in expenses to deliver them globally. The goods are being charged based on volume weight rather than the actual weight. This increases the overall costs because sometimes the suppliers miscalculate the dimensions or the weight of shipments allowing the transportation to charge more than the actual price.
Sometimes, extra documents are required to clear customs in China or at the country of Import, which can cost you some amount at the customs or the port. Some of the ports or the city you are sending your shipment into has a higher duty fee which can again cost you extra money. Usually, some of the unexpected costs can occur in a way when your delivery has been delayed. The customer charges you an additional amount upon late delivery. This concludes the reason why having on- the ground presence matters when it comes to the supply of goods on time.
What to expect...
Current shipping issues involve a large number of problems associated with the pandemic coronavirus. The pandemic has dramatically influenced the world of trade and supply chain, not allowing the exports and imports of goods freely as before. Most of the reasons are the barriers cities have created among themselves to avoid spreading the virus.
Shipment agencies also face unexpected costs and delays due to conditions the trade has made among themselves. Many countries, including China, have encountered an issue with international exchanges due to global shipping issues this year.
Many containers are also delayed in the process due to the inspections at customs, which can be very time-consuming, resulting in shipment delays.
How Can GlobalTQM Help You?
GlobalTQM is a sourcing China company working to help US businessmen forward their orders smoothly. We can help you get through this global shipping crisis or at least minimize the effects on your business operations.
Order Management
With our order management service, we remain with you from supplier validation to negotiations, purchase order review, preparation, and handling of your purchase orders. You can get control of your international order remotely by purchasing our order management service here:
Sample Concierge
When the shipping costs have become so high, why would you spend thousands and hundreds of dollars to receive samples from China’s suppliers? GlobalTQM’s Sample Concierge service, we receive samples from multiple suppliers, review each sample, check the accuracy, consolidate the samples and ship them to you as a single shipment. So you can save your time and money on receiving multiple faulty samples in multiple shipments.
You can know more about our Sample Concierge Service here: