Top 3 Effects of 2013/2014 Winter Snow & Ice Storms Have on Shipping
On the phone with a friend and colleague, I was told a story of how Chipper Jones jumped on his four wheeler to rescue Atlanta Braves first baseman and former teammate Freddie Freeman from a frozen freeway that tons of motorists were stuck on.
I knew about the horrible conditions on Atlanta interstates from rare winter weather because it was reported by Universal Cargo Management employees from our Atlanta office. People trapped on the road, people leaving their cars behind and walking off the interstate…
The weather has UCM’s Atlanta office employees who can’t walk to work working from home. That’s the case at businesses everywhere there. The situation is similar at our Richmond, Virginia office.
The severe weather this winter has had serious effects on international shipping to and from the U.S.
So how is all this snow and ice affecting shippers’ import and export activity and international shipping in general? Here are the top 3 ways:
#1 – Diminished 2013 Shipping Season
U.S. shipping numbers in the U.S. took a big hit when winter hit hard early. Ice slowed port operations, hampered shipping through the Great Lakes, and resulted in a significant drop in shipping numbers.
A gCaptain article reports:
While the trade had been slightly behind 2012’s pace through November, the gap grew significantly when an early and harsh start to winter caused weather-related delays at loadings docks and vessels were either slowed by or beset in heavy ice.
In December, winter weather limited shipments to 5.1 million tons, a decrease of 20 percent compared to a year ago.
#2 – Port Delays & Closures
The snow and ice has not merely backed up the loading and unloading of cargo, it has been so much this winter that ports have actually had to shut down altogether on days.
If you subscribe to our blog (you can do so by entering your email address in the box on the right side of this page) then you’ve received Shipping News Alerts recently regarding port closures and delays.
Delays have not been limited to the East Coast where the snowfall and ice has been so heavy. Because of the backups at ports on the East Coast, rail has been delayed coming back to the West Coast. This has caused backups and delays at Ports like Los Angeles/Long Beach.
#3 – Shippers Losing Money
This winter weather is causing money to bleed all over the place for shippers.
Delays and port closures are, of course, expensive for shippers. For many, it has meant inventory not arriving on time. But beyond the obvious costs to time and money caused by shipping delays, extra fees add what feels like insult to injury.
Long wait times and failed pickups are extremely difficult on truckers. Many independent truckers and trucking companies are losing a great deal of money, more than they can afford, to extremely long delays the weather has caused. In order to supplement, many have added congestion fees to mitigate the cost of sitting for hours upon hours and losing days to the weather.
These congestion fees, of course, go to the shippers. Extra trucking fees are not the only ones shippers are seeing either.
In New Jersey, for example, there’s the “New Jersey Snow and Ice Removal” law. Failure to remove ice and snow from on top of shipping containers could end up resulting in fines from $500 to $1,500.
Logistics companies handling shipping containers for importers and exporters in the state are charging snow and ice removal fees from $150 to $200 to cover the time and cost of removing the snow and ice when it is necessary to do so.
Seeing such fees outside of New Jersey where such snow and ice removal is necessary simply for safety reasons could possibly take place as well.
It will be a while before the full financial effect of this extreme winter can be calculated, but I’d bet many reading this blog have already felt the drain and know what this weather is costing them.