GPC Ask the Experts North America/
Shipping & Logistics

SESSION SPONSOR

Moderator:
• Stephen Paul, Ray-Mont Logistics

Panelist:
• Alexandre Martinelli, MSC Mediterranean Shipping Company Mexico S.A. de C.V.
• Mark Gaimster, DSV Panalpina
• Jordan Atkins, WTC Group
• Gareth Hou, CN Rail

At the GPC’s Ask the Experts North America: Shipping and Logistics session, Stephen Paul led Mark Gaimster of DSV Panalpina, Gareth Hou of CN Rail, Alexandre Martinelli of Mediterranean Shipping Company Mexico and Jordan Atkins of WTC Group in a discussion about the global container crisis.

Mr. Atkins commented on the overall climate for exports coming out of Canada, underlining that it had been very difficult for the past 6 months and is expected to continue to be so in the coming months. He mentioned a realignment from North-South services to East-West services in order to cater to the lack of supply coming out of Asia. He highlighted that the issue was indeed lack of supply rather than increased demand as imports are only up 5% in demand from Asia to North America compared to pre-pandemic levels. The issue, he says, is that shipping companies are focusing on the Asia-North America route, at the expense of many export customers. He mentioned the ripple effect this is causing as prices are restructured, causing disturbances in rail and road transport, too, and leaving products stuck at ports as well as restricting exports to India, South America and the Middle East. 

Mr. Gaimster touched on the Longshoreman contract renegotiation, which should be happening in June/July 2022, saying that Longshoreman are seeing that steamship lines, truckers and rails are making more money now and so they also want in on it. He mentioned that there is consequently a growing concern about a work slowdown or a strike as the movements and strain of these conversations may have an adverse effect on this already troubled time. Gaimster highlighted the need for everyone on both the import and export sides to be aligned to the renegotiations and to come up with plans to reroute cargo but mentioned that imbalance in supply chains mean this may not be possible. 

Mr. Atkins gave some recommendations to shippers, underlining that with the reduced capacity and service options out of major ports, the key this year is not planning too far ahead in terms of making forward sales and that traders should be working much more with their logistics companies to ensure capacity. He indicated that equipment availability is not so much of an issue any more but vessel space definitely is, mentioning that this is uncertain at the best of times but if there’s another port shutdown or route blockage, the best thing shippers can do is to make sure they’re not caught out on speculative shipment. He predicted that this year will be more of a hand-to-mouth situation and that adaptability is key. 

As the conversation moved to logistics inland, Mr. Hou gave Chicago as an example, saying that shippers are purchasing products way in advance of seasonal requirements, i.e. purchasing spring products now, as they know that there could be delays and port issues, etc. This means, he indicated, that you have huge floods of imports coming into the Chicago area that need to be picked up from rail terminals and stored somewhere and so there’s a lot of product sitting around waiting to be redistributed. He mentioned that CN has new initiatives to get people picking things up during unconventional hours in order to add some more fluidity. Mr. Paul and Mr. Gaimster agreed that there is a need to look at new ways to shift cargo and explore new options in order to shorten lead times. Panelists agreed that the crisis would continue long into next year and also touched on the problem of recruiting new labour. Mr. Gaimster stressed the importance of maintaining good relationships with logistics providers.