Pandemic-related Gridlock Puts a Crimp in International Moving
Pandemic-related gridlock continues to disrupt various supply chain industries. Make no mistake, the moving and hauling industry, especially the international move market, is not immune from the disruption.
Anchored ships packed with containers from foreign shores dot the horizon in big U.S. ports. Warehouses are overflowing. And consumers and the corporations and government offices who move their employees around the world anxiously await news of the outbound shipment or arrival of furniture and other belongings. Meanwhile, international movers work amid a high-pressure environment of labor and equipment shortages, higher costs, and long delays.
Even pre-pandemic, international moves came with more requirements than domestic hauls in packing, scheduling, and logistics. Moves for government employees had even more layers. For instance, shippers’ household goods need to be packed by professionals. And government moves are packed and loaded in a unique government-specific way.
There have always been a lot of moving parts to coordinating the logistics of an international move. It starts and ends with the added transport to and from ports before or after the actual overseas shipping. Truck driver shortages were already causing a wrinkle in this part of the process. COVID deepened that wrinkle to cause other problems.
Many Moving Parts
The labor shortage still exists now not only among drivers but also among dock workers. “That’s why you see all these vessels off the coast of Long Beach, Seattle, Oakland, or New York to name a few,” says Hosea Bottley, President of Aaversal Global Relocation, LLC, a Washington State-based international forwarder that has been serving both government and corporate clients for more than 25 years. “Ships can’t get to the port and moving companies and international relocators like Aaversal don’t have access to the same sizable pool of workers.”
Equipment and supplies are also at deficit, he continues. For example, there’s a shortage of automotive parts for trucks, chassis, and gaskets in particular. This has slowed deliveries and pickups to or from the ports at a time when international moves are on the rise. The increased demand puts more pressure on international movers who must operate with diminished resources. “In some places, there are actually no resources at all,” says Hosea.
The Perfect Storm
“It’s the perfect storm,” says Budd Van Lines Senior Vice President Gary Grund, “Providers face challenges at every turn and must step up to combat the many issues impacting the marketplace.”
Indeed, the markers show that the economy hasn’t bounced back yet. What’s more, experts predict the supply chain will not see improvement until at best the beginning of 2022. It’s really tugging hard on everyone’s purse strings. “Most everyone’s on the hook,” says Hosea. Costs have skyrocketed for customers (e.g., Aversal’s private corporations and government and State Department organizations who are moving workers overseas) and costs have also risen for providers. “The cost of doing business is higher every step of the way.” This includes the packing, the haul to the port, booking the shipment with a carrier, and the follow-up to make sure it’s delivered. “Standard $12,000 shipments could now be as high as $20,000,” Hosea says.
One of the places in which the increase costs have had real impact is related to demurrage. Demurrage is a charge raised when the full container is not moved out of the port/terminal for unpacking within the allowable free days offered by the shipping line. The trucker shortage is causing a real bottleneck at the ports, and there’s been no leniency from the shipping companies who levy the demurrage. That’s [the shipping companies] are one part of the moving supply chain making tremendous profits,” says Hosea.
Hopeful Supply Chain Research
Despite the challenges posed by COVID and the shutdown US economy, businesses are surviving—in some cases even thriving. In fact, in a recent report by Capgemini Research Institute, 62% of supply chain executive respondents said supply chain resilience would be a key priority in the wake of the pandemic.
According to the report, raw materials backlogs, and, applicable to the international moving industry, labor shortages and capacity limits continue to force companies to pivot. When it comes to your supply chain, resiliency is the name of the game to come out winning. There are numerous ways a company can increase the resiliency of its supply chain. The study defines a resilient supply chain as one with agility, diversification, and contingency planning.
- Agility reflects how quickly a company can pivot, including increasing or decreasing production, or setting up new channels of distribution.
- Diversification applies to the sourcing of products, transportation modes, and partners
- And contingency planning incorporates things like demand planning and the ability to prepare for seen and unforeseen disruptions.
Want to Pivot? Relationships Matter.
But what are the underpinnings established by a company that more easily allows them to pivot in a unique situation like the post-pandemic environment. Relationships, for example, are extremely important. Hosea says that existing relationships and the outstanding reputation that grows out of those relationships have been a real asset. “We don’t have to reinvent. We’ve formed strong partnerships with many companies, 20-year-plus partnerships with some of these companies. Plus, I have personally been in the business for 28 years.”
During that time, he emphasized, Aaversal has established trust with companies, both clients and business partners alike. That makes a huge difference in everything from setting expectations to working well together to establishing business and payment terms. Plus, word spreads. As a result, Aaversal has been able to cultivate new relationships which increases its ability to source additional shipment opportunities for clients.
Visibility and Communications Work Hand-in-Hand
In still another survey of supply chain executives, more than 90% said visibility into their supply chain is important to their company’s success and vital to the overall customer experience. Communications is essential to execute with visibility. At Aaversal, communications is a strong corporate value. The 11-person strong Aaversal team lets shippers know that inevitably, a move today will take longer than it would have in years past. Aaversal is upfront with this information. “We ask for patience and set customer expectations at the outset. Also, we provide updates on shipments.” says Hosea.
Visibility can help assuage customer frustration—even fend it off. “Sorry, your shipment is delayed, and we expect it to arrive 2 weeks from Thursday” is far more effective with customers than a shoulder shrug update and a “Sorry we aren’t sure where your package is and when it will even get to you.”
Both relationships and communications also factor into pricing. Distance notwithstanding, excellent relationships with overseas agents is an imperative. Hosea says that Aaversal connects with them to discuss shipments and ensure a shipment gets attentive, if not priority, handling. These discussions also provide the Aaversal team a more specific idea of timeframes which factor into the overall rate and enable the team—all who are expert raters—to develop accurate ratings. If the unexpected occurs, which can happen in this uncertain climate, and the rate increases, Aaversal is completely transparent and accountable and shares invoices and all necessary information to substantiate any cost increase.
No Silver Bullets. Challenges Many.
It’s fair to say that there’s no easy way around an already challenging international move market. Still, an openness to new strategies and continued attention to performance standards will bode well for survival in the economy’s new normal.
“Working with providers like Aaversal who operate within this framework supports our business values,” says Gary. “Plus, it’s good for business…ours and Aaversal’s…and helps ensure that we provide topnotch services to our commercial partners and the employees they are moving around the world.”