This summer, two possible risks could disrupt the supply chain, as U.S. supply chain managers prepare for the peak season of ocean shipping.
The first risk is human factor — the lack of workers at ports on the West Coast, where labor disputes have been ongoing for more than a year. The workers and the regulators are still negotiating over pay and profit-sharing issues, which have become more contentious after the pandemic. Meanwhile, the shipping market has recovered to its pre-pandemic levels of demand and pricing.
The second risk is the matter of nature that affects container shipping is the ongoing drought in Central America. The low water levels in the Panama Canal limit the size and number of ships that can pass through it, which increases the shipping costs and delays the delivery times.
The drought has reduced the water level of the channel, which affects the shipping industry in two ways. First, it imposes higher surcharges for each vessel that crosses the channel, as the waterway authority tries to maintain its revenue. Second, it restricts the vessel draft, which is the depth of the vessel below the waterline. This means that each vessel can carry less cargo, reducing its efficiency and profitability. To cope with these challenges, some shipping lines have charged shippers an extra fee of $300-$500 per container.