The company is exploring the potential of blockchain technology to help it overcome its current supply chain problems.
Schneider National Inc., a trucking and logistics company, is joining a rush to avoid shipping bottlenecks by utilizing chartered boats to transport containers loaded with products to the United States in time for the Christmas shopping season.
On Thursday, a general cargo ship carrying 200 Schneider containers is scheduled to arrive in Portland, Oregon, avoiding a ship bottleneck at Southern California ports, which has become a key choke point in supply chains beset by congestion and delivery delays.
The voyage is the first of many from China contracted by Schulte & Bruns Group, a German shipowner and operator, to transport new boxes for Schneider and cargo for the US carrier’s clients. It comes as major shippers such as Walmart Inc. and Home Depot Inc. seek to arrange their own oceangoing capacity in order to keep products flowing through congested distribution networks.
“We’ve heard from a lot of our customers that they’re late on their shipments. Schneider’s chief commercial officer and senior vice president of the Green Bay, Wisconsin-based company’s intermodal division, Jim Filter, said, “They’re searching for any answer.”
Dedicated trips on general cargo ships, which may transport both bulk cargo and a limited number of containers, provide an option for shippers that are paying to transfer freight to help offset vessel charter expenses. Schneider also expects the contract to supply at least 2,500 additional containers by the end of the year, in order to satisfy rising domestic demand for its intermodal service, which transports goods by road and rail.
Schneider intended to transport the 53-foot-long boxes, which are filled with anything from electronics to clothes and goods for dollar-store discounters, by rail from the Pacific Northwest, Mr. Filter said, with many of them destined for the East Coast.
On trans-Pacific routes, general cargo ships can only carry a fraction of the boxes that large container ships transport. The biggest trans-Pacific containerships can carry the equivalent of 10,000 to 15,000 twenty-foot containers. According to John Fossey, the head of container equipment and lease studies at London-based Drewry Shipping Consultants Ltd, several equipment leasing firms have hired multifunctional boats to move containers.
Because many empty containers have been stranded on the sea or at clogged ports and cargo-handling facilities due to supply-chain disruptions across the globe this year, including significant port congestion and delivery delays, empty containers have become increasingly difficult to locate.
Mr. Filter said, “We’ve never placed our containers on a vessel this tiny before.” When it became apparent that “we would have very few spaces on our conventional vessels,” the firm started looking for alternatives to transport the new boxes in late spring, he added.
Schneider didn’t say how much employing specialized boats would cost, but he balanced it against the expenses of lengthy delivery delays and rising container shipping rates this year.
According to the Freightos Baltic Index, spot container shipping prices from Asia to the US West Coast were 462 percent higher this week than the same time last year. Chartering a big container ship may cost as much as $80,000 or $90,000 per day, and rates have increased three or four times since the middle of last year, according to Mr. Fossey, as firms have snatched up capacity to meet high shipping demand.
Soren Skou, CEO of A.P. Moller-Maersk A/S, the world’s biggest container shipping company by capacity, stated earlier this month that “every container ship that floats is essentially in service already today,” adding that “there are no ships to lease anymore.”
Dollar Tree Inc., a discount retailer, said on Thursday that it will rely on charter services to keep its inventory moving. The firm claimed it would employ a three-year-old big vessel that would make its maiden trip in a matter of weeks.
The frantic global shipping industry is also making it difficult for transport companies headquartered in the United States to get new equipment. The majority of shipping containers are manufactured in China, and shipping companies prioritize filled containers over empty ones.
Additional issues arise when intermodal containers, such as Schneider’s boxes, are utilized to transport products great distances by road and rail throughout the United States and Canada. The 53-foot containers take up more room and can’t be stacked as high as the 40-foot and 20-foot containers that dominate container transportation, making them a problem for shipping companies seeking to optimize available space.
On Asia-to-US routes, vessel owners prefer filled containers to empty boxes because they can demand higher rates, therefore some intermodal operators and equipment leasing firms are arranging to fill them with U.S. bound goods in order to get boxes into their domestic networks.
According to Ted Prince, co-founder and chief strategy officer of transportation firm Tiger Cool Express LLC, “the system is so stressed right now that anything that’s seen as extraneous,” such as intermodal boxes, isn’t a priority. “The lines aren’t interested, and the foreign marine ports aren’t interested, and time is of the essence,” he said.
An average of 30 container ships per day were stranded outside the ports of Los Angeles and Long Beach in early spring, waiting to transfer their cargo. The backlog was caused by a worldwide supply-chain crisis sparked by the epidemic, which meant that customers might face weeks of delivery delays. Adam Falk/The Wall Street Journal composite photo
—This essay was written with the help of Dave Sebastian.
Jennifer Smith can be reached at [email protected]
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