Navigating Global Shipping Challenges

The global shipping industry is currently experiencing a crisis created by a perfect storm of the COVID-19 pandemic, uneven global economic recovery, surges in eCommerce and home deliveries, Brexit, and lingering capacity challenges. The outcome is that international demand for freight is exceeding the capability of the world supply chain – resulting in equipment shortages, rising costs, and inconsistent schedules that are affecting a variety of businesses on a global scale.

To address the challenges of navigating this new terrain and provide actionable takeaways, Sterling Lexicon and Suddath co-hosted a webinar for a discussion with industry experts: William P. Doyle, Executive Director of the Maryland Port Administration; Carlos Pelaez, owner of freight forwarding company, Fletamentos y Cargas; and Cathy Koslowski, Global Mobility Director with Jacobs. The discussion was moderated by Teela Gleason, CRP, GMS-T, Senior Vice President for Global Client Relations with Suddath.

Key Takeaways
With delays currently expected to continue through at least early summer, now is the time for companies to take a global look at available routes and options, and plan and budget accordingly. Logistics teams need to be given authority to think creatively and find alternative routes, combined with air, rail and road transport to ensure mobile employees and their personal effects can get to where they need to be, as quickly and efficiently as possible.

“What we’re seeing at the root of all this congestion is a direct correlation to the COVID-19 pandemic,” Doyle shared. “We had such a decrease in the amount of imports coming in that you saw the ocean carriers laying off ships and taking ships off service because there was no cargo. Now we are seeing ships take 10 to 14 days before they’re able to come into port.”

How Companies Can Navigate
Companies may not have total control over the causes of the current challenges, but they CAN control how they are receiving and sharing information and updates with clients, senior leadership, business unit managers and mobile employees – while staying on top of alternatives.

“As suppliers and caretakers, we have a responsibility to make sure that we are carefully and quickly communicating and setting proper expectations to determine what the needs are of everyone involved."

Teela Gleason, CRP, GMS-T

Both immediate and longer-term solutions will require collaboration and creativity across the full transportation spectrum. To mitigate the impact of delayed timelines and rising costs, the first priority is to stay continuously up to date on changing conditions. There is no “one-size-fits-all” approach, so having the expertise of global partners who can recommend the best options is critical. When decision makers can see and compare the cost and scheduling impacts of such alternatives as using different routes and ports, combining sea and air shipments, or extending storage and furnished temporary living allowances, for example, it enables them to make better, more informed decisions.

See a summary of the pros and cons of some actions to consider.

Company culture, business priorities and the strategic goals of assignments will vary, but the true cost of all transport decisions needs to factor in the impact on the employee and any accompanying family members, too. How quickly and easily they will be able to settle in and become productive in the new location, or return home, for those on the repatriating side of the spectrum, needs to be part of the decision making process.

Flexibility is key. Both internal corporate mobility teams and the external partners they work with need to adapt rapidly to changing circumstances and be able to offer a variety of options.

Business leaders understand that navigating in a pandemic is exceptionally challenging, and the health crisis is contributing to delays, worker shortages and cost increases that can have an impact across multiple points in an employee’s relocation journey. The key is to know about these challenges as far in advance as possible, to be able to plan and budget accordingly.

Information and data play a critical role. As Koslowski put it, “knowing allows action.” Conditions vary greatly by location, so key stakeholders need regular and clear updates about what the current situation is at both the origin and destination locations, what alternatives may be available, and most importantly, what the cost and impact will be, to the relocating employees and to the project or business need for the assignment. Koslowski added that, while having those conversations around planning and costs can be difficult, they present another good opportunity for global mobility teams to demonstrate their knowledge and strategic value to the business.

What’s Next
Several best practices emerged from the discussion, including the understanding that it is more critical than ever to be fully transparent when communicating with clients and to embrace bold ideas.

Key recommendations included:

• • Communicate to all involved, every step of the way
  • Think globally and  plan for the unexpected
  • Prepare and budget for increased costs and transit delays
  • Understand that every scenario is going to be different
  • Partner with industry experts who can provide the right information to enable businesses to determine what works best for them and their mobile talent

There is light at the end of the tunnel – but until then, the entire industry will have to keep working together using innovative ideas and fluid planning to set the stage for successfully navigating these unprecedented times.

The good news is that many global mobility professionals are already having these bold, honest conversations. A poll of the webinar audience found that 69% of respondents are already engaged in conversations with senior leadership, establishing a clear path forward to set expectations and help with future planning.

“Be prepared with enough time to try and solve any problem that may come up. Be ready with solutions for problems that may happen now or in the future,” Pelaez advised.

A key theme that all of our panelists shared is that knowledge is power. Sterling Lexicon and Suddath will continue to share essential information to keep our clients and partners in the know as conditions continue to change.

Did you miss the webinar? Access the recorded version.