The ground freight situation is so totally snarled that global ocean shippers have been forced to move almost all of their capacity into the sky. They already started sending anything important by air. It’s a lot more expensive but at least the packages get to the recipient. For now. That “last mile” from the airport to the customer is still going to be a dicey proposition.
Ground freight situation frightening
Cargo and freight challenges have merchants and retailers pulling their hair out, frantically trying to get their inventory levels ready for Christmas. All the things they ordered long ago are sitting somewhere in California.
Once the ships were finally unloaded, the warehouses quickly clogged because the rail companies and trucking firms haven’t been able to haul it anywhere. It’s all still sitting in the inland empire of California cargo warehouses.
On top of that, California declared war on independent trucking contractors and most of them are about to go out of the freight business, when the law starts being actually implemented. Then there is the looming rail strike.
Joe Biden assured America that there’s a deal in place and he’s keeping his fingers crossed that it will stick. Workers haven’t voted to accept it yet and they may decide not to. They aren’t real happy with the version on the table.
FedEx is having their own nightmare before Christmas. Their independent ground delivery drivers warned that a third of them are on the verge of financial collapse unless they get more money from the company. FedEx Corp tells them sorry, but forget about it. The parent company is struggling to stay afloat too.
They’re closing offices and parking planes. Just as the ocean shipping business is going to need more air cargo capacity. That seems like another freight storm brewing on the horizon.
Big three go airborne
There are three European companies which “dominate container shipping — Denmark’s AP Moeller-Maersk, France’s CMA CGM Group and Switzerland’s Mediterranean Shipping Co.”
They get horrified whenever anyone mentions airfreight, calling it “an expensive distraction from their globe-spanning fleet of giant vessels, container terminals and related logistics businesses.” Until now. All that fancy freight infrastructure is clogged solid.
They’re singing a new tune and trying to beat their competition to the best deal in the air cargo industry they can grab. They’re even buying planes.
“For some key customers airfreight is a must,” Michel Pozas Lucic, global head of Maersk’s airfreight division, relates. “Auto-parts suppliers, clothing manufacturers and tech companies, which all typically rely on sea freight to move their goods, had started to switch to air.”
“You can’t rely only on ships anymore,” Abbie Durkin declares. She’s the owner of a women’s clothing and accessories boutique.
“I’m flying in our entire winter collection to make sure it arrives before Christmas.” The whole freight industry is upside down over it. Maersk “bought German airfreight forwarder Senator International, doubling its air-cargo volume.” They have also “been buying airplanes for its air-cargo division.“
