Container Allocation 2021: What You Need to Know
For decades, container cargo shipping has been a regular source of moving goods worldwide. A lucrative industry to be part of, it has become the norm for shipping retailers and container carriers to compete globally in a race to offer the best container transportation services.
With that, to keep a competitive edge, container carrier companies look at two things, how to control expenses (increase profit) and how to best meet customer demand (strategic importance). To address these two things, it is crucial for them to have an allocation policy that helps move empty containers around ports while preventing the loss of sales when there is a shortage. Based on projected volumes, container allocations work to divide up carrier cargo among various shipping vessels and ports.
Unfortunately, due to the global pandemic, many allocations that worked in the past have gone out the window. As we progress into the future, shipping carriers must adjust their ability to forecast allocation strategies that meet new market demands.
Recently, many leaders in the logistics industry have addressed this issue, suggesting a few future container allocation forecast approaches.
Future Container Allocation Forecast Approaches
In these highly volatile times where ports are backed up and empty containers are in a shortage, the old way of prioritizing container capacity based on profit and importance requires further evaluation. Namely, the relationship between shipping carriers needs to be a partnership, instead of a competition. Leaving the standard 10-week, rolling basis allocation policy for a yearly commitment could offer both shippers and carriers the ability to foresee priorities and bottlenecks more easily. In turn, data will not be spread all over the place, making it easier to track as well as see open capacity. This approach could result in less blank sailings and struggles with tight capacities.
A huge task to navigate, to achieve this kind of allocation and transparency. This approach would help to ensure the longevity of service.
Perhaps these changes could improve port congestions and container shortages. While most of us hope for the best, it is pragmatic to have a backup plan. Having a trusted logistics partner like ClearFreight won’t guarantee immunity from port congestion or container shortages, but it will help you focus on your business without worrying about your supply chain. Contact us today to learn how we can help with your logistics so you can get back to what you do best!