Shanghai port congestion: Outcome?
By SwizStick • Jul 6th, 2007 • Category: China, Supply Chain ManagementSo what was the outcome of last week’s frenzied rush to gets exports out of the Port of Shanghai before the official date of the tax rebate revisions? Not much. As of Friday of last week, there was a large list of containers we had identified that were at risk of rolling as we were not sure if the containers would be gated-in on time. Our consolidator in Shanghai informed us that truckers had been waiting all day long and would continue waiting to get containers past the terminal gates and that empties were taking upwards of 9 hours just to pick up.
Come Monday it took a long while for our carriers and consolidator to verify what had actually made it into the gate for vessel departure. At the end of the day, only a handful of containers from my list had indeed been rolled, but since we padded our official internal transit times they are expected to arrive and deliver within our required time window.
So after extended nail-biting we turned out ok. However, I should note that we were only ok thanks to plenty of proactive planning, pushing and prodding, and the way we structured our timelines internally:
1) Much earlier in the year, updating and revising our internal transits from origin to allow for volatility and congestion, which allowed for improved order planning and accuracy.
2) Once we heard the news about the impending change to the export tax rebate, we contacted our carriers and consolidators/service providers on both sides of the ocean to gather information and input to assess the impact to our own supply chain.
3) Simultaneously, we worked within our own company to reach out to other departments to brief them on the situation and develop a priority delivery plan for those orders that were absolutely crucial.
4) Communicated order priority to our consolidators/service providers to ensure that, if push came to shove, those orders deemed a priority would ride first.
5) Opened up bookings to our entire carrier pool, instead of only those carriers allocated for Shanghai.
6) Explored emergency plans with our service providers to re-route shipments to the nearby port of Ningbo, if need be.
These are the main steps my company took to weather the congestion storm in Shanghai. Luckily, or perhaps because of our planning, we weathered the storm quite well. Granted, I work for a company who enjoys the control and personal treatment that comes with large volume container line contracts, but that doesn’t mean a smaller outfit can’t succeed along similar lines. Being proactive, decisive, and working with some honest and reliable service providers can go a long ways to smoothing out the wrinkles in your supply chain.
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