In the ever-changing logistics landscape, companies relying on international shipping are facing mounting challenges, from vessel space shortages to skyrocketing surcharges. However, for businesses like Northwest Naturals, staying ahead of these disruptions is key to ensuring smooth operations. As your reliable partner, Northwest Naturals has developed a robust global supply chain network that helps mitigate potential delays, ensuring we can continue to meet your needs.
Let’s dive into the latest supply chain updates and how Northwest Naturals’ proactive approach keeps production steady, even in challenging times.
Capacity Crunch on India to Europe and US Routes
A significant concern for shippers is the ongoing capacity crunch affecting routes from India to Europe and the US. Severe space shortages have led to halted bookings, especially on critical routes to Northern Europe and the US West Coast. Indian shippers and freight forwarders are struggling to secure vessel space, with many routes “sold-out” for July, resulting in limited availability for spot bookings.
These challenges are compounded by schedule disruptions, port congestion, and diversions through the Red Sea. This could spell delays for many businesses depending on imports from India, but Northwest Naturals remains insulated from these challenges due to our diversified global farming partnerships. By sourcing ingredients from multiple regions worldwide, we avoid bottlenecks, ensuring our supply chain remains robust even during periods of disruption.
Trans-Pacific Container Market Surcharges
The Trans-Pacific container market is also experiencing an early surge in peak season demand, driving unprecedented price increases. Carriers have imposed surcharges earlier than expected, with rates doubling compared to previous years. Starting June 1st, a $1000 surcharge per 40-foot high-cube (HQ) container was applied for both US West Coast (USWC) and US East Coast (USEC) destinations. By June 2024, this surcharge increased by another $1000, with some liners announcing further surcharges of up to $2000 per container for USEC routes by July 1st.
These surcharges are driven by the same capacity constraints and early peak season demand seen elsewhere, with carriers capitalizing on the pressure. For example, Maersk recently announced a $7000 price hike in just five days. For many businesses, these rapidly rising costs can significantly impact transportation budgets. However, Northwest Naturals’ longstanding relationships with carriers and global suppliers ensure we stay ahead of these challenges, allowing us to maintain production schedules without passing these unexpected costs onto our customers.
Domestic Transportation: Keeping Goods Moving
On the domestic front, transportation costs and capacity are also experiencing shifts, though not as drastically as international routes. The national average dry van linehaul rate remained steady at $1.70 per mile, while spot rates have shown little change compared to last year. For the most heavily trafficked lanes, rates have increased by about $0.06 per mile, averaging $2.12—well above the national average.
Meanwhile, refrigerated goods, which are critical for businesses like Northwest Naturals, have seen minor increases in linehaul rates. The national average reefer linehaul rate rose by just under $0.02 per mile to $2.04, even as load volumes surged by 15%. During peak seasons, demand for refrigerated transportation spikes, increasing pressure on supply chains. Yet again, our foresight and strategic partnerships enable Northwest Naturals to navigate this increased demand with ease, ensuring on-time delivery of our premium products.
Northwest Naturals: Your Strong Supply Chain Partner
At Northwest Naturals, our ability to remain agile in the face of supply chain disruptions sets us apart. By partnering with global farming networks, diversifying our supplier base, and working closely with trusted logistics providers, we ensure that production remains uninterrupted. Whether it’s the impact of international shipping delays or domestic transportation challenges, our proactive approach keeps your supply chain running smoothly.
We know that in today’s global economy, disruptions can happen at any moment. That’s why Northwest Naturals stays ahead of the curve by constantly assessing and adjusting our supply chain strategies to avoid bottlenecks before they occur. By doing so, we guarantee that our customers continue to receive high-quality products on time, every time.
Looking for a reliable company to partner with? Trust Northwest Naturals to be your partner in navigating supply chain challenges, with the expertise and forward-thinking strategies to keep your business thriving. Contact us today!