How Can Packaging Help Combat Port Congestion Issues?
Port congestion leads to delayed order fulfillment and increased costs. Find out how to minimise these concerns with optimised packaging design.
The ports of Los Angeles and Long Beach handle approximately 40% of the United States’ cargo, but in September 2021, the backlog of ships waiting outside of the ports was at an all-time high. According to the Los Angeles Business Journal, the ports took measures to reduce congestion over the next several months—including increasing operating hours and finding places to temporarily store excess shipping containers—but the issues have not fully been resolved.
In their Asia Pacific Market Report, Maersk explained that since inventory levels in Europe and the U.S. are so low, cargo volumes are likely to remain high even as retail demand decreases after the 2021 holiday season.
With this in mind, what can brands do to combat the negative effects of port congestion and shipping delays?
While packaging is not a direct answer to port congestion, the right packaging solution can help your company mitigate the issues that arise from unexpectedly long queues outside of ports.
Avoid Shipping Delays By Making Your Shipments More Efficient
Increased demand for container shipping—combined with a shortage of dock workers and truck drivers to transport the products once it arrives—has led to dramatic shipping delays for brands who ship their products from Asia to Europe or the United States. Adobe reports that out-of-stock messages on retail websites have risen by 172% over the course of 2021, displaying just how hard it has been for brands to fulfill their orders as usual.
Some brands have tried tactics such as moving their destination ports or switching from ocean freight to air freight. However, demand for air freight has also been high, leading to capacity constraints.
Instead of scrambling to find new avenues for shipping, brands should look into how their products are currently being shipped within containers. Are there opportunities to increase the efficiency of how products are being packed?
Shipping less air allows you to ship more products
Oftentimes, packaging dimensions are not optimised for containers, leading to empty space within boxes. This wasted space can have far-reaching implications for your brand—especially during a time when shipping containers are in high demand.
By optimising your packaging, you can eliminate empty space and fit more products into a single container. Even though you don’t have control over how fast your products will be able to be transported, you can mitigate potential delays by maximizing shipments.
Mitigate Rising Freight Costs With Strategic Packaging Design
According to Freightos Baltic Index, the global average price for a standard 40’ container was approximately $9,500 as of December 2021. One year prior, container rates were less than $3,000. There are several factors contributing to this increase, including COVID-19 port shutdowns and an increased demand for consumer goods. These unprecedented freight costs can also be partially attributed to port congestion—with many container ships tied up in delays, it has become harder for brands to secure container space, allowing freight providers to charge more.
One way to mitigate rising freight costs is to take steps to increase your container density. Making the most of all of the available container space means that you will not need to purchase as many containers, thereby saving you money. With freight costs being so high, even a 10% increase in units per container can make a significant difference in how much your brand is spending on freight shipping.
Plan Ahead for Potential Product Damage
Another issue that can arise from port congestion is product damage. Because it is taking much longer for products to get delivered, it is likely that your packages will be stuck at the factory or in containers for extended periods of time. Therefore, it’s important to make sure your packaging is designed for distribution hazards that might occur.
For example, if you use desiccant bags to absorb moisture in containers, you may need to increase the amount of desiccant used if the products are going to be in the container for longer—or if the container ship is being rerouted through an area with a more humid climate. Another solution would be using coated cartons that repel moisture. When it comes to humidity, corrugated materials with a higher percentage of primary fibres tend to fare better than materials that are heavily recycled.
There is also a potential for damage due to the rocking motion of the ship. If your container ship ends up stuck in port before the cargo is able to be unloaded, your packages may be exposed to more movements than anticipated. If your packaging does not have the material integrity or appropriate cushioning to withstand these types of movements, your products could end up damaged.
Planning ahead for potential product damage with an updated packaging design and additional material testing can minimise the negative impact that port congestion may have on the packaging itself.
Packaging Optimisations Can Protect Your Brand
Experts expect that backlogs at major ports across the world will not be resolved until well into 2022. The past few years have shown supply chain professionals that disruptions can be wildly unpredictable, and that it’s important to be prepared for the future. With this in mind, it’s time to start thinking about how your packaging could be improved to help your brand mitigate some of the issues associated with supply chain disruptions.
BillerudKorsnäs Managed Packaging works with you to design a customised packaging program that is optimised for efficiency and sustainability, allowing you to improve container density, lower freight cost spending and reduce product damage. Reach out to a packaging expert today to see what packaging optimisations could do for your organisation.
To learn more about how packaging can help you plan for future supply chain disruptions, view our infographic.