News / Ports and inland bottlenecks, not ships, now choke global supply chains

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Port congestion and inland logistics bottlenecks are emerging as the primary constraint on global supply chains, even as vessel capacity continues to expand, according to DHL Global Forwarding.

Despite a significant orderbook of new ships entering the market, structural inefficiencies on land are limiting the effective flow of goods.

“We continuously see around 3m teus are tied up in port congestions,” said Jacob Moe, global head of FCL and trade management at DHL GF, during a recent webinar.

He noted that this congestion is distorting the widely held narrative of oversupply in ocean freight, and underscore that whilst capacity appears abundant on paper, operational realities tell a different story.

“All vessels cannot go on all trades… large vessels can only call certain places,” Mr Moe explained, adding that capacity must be viewed in a far more granular way.

The result is excess capacity globally, but persistent shortages on specific routes and in key locations.

And the problem is increasingly shifting inland, said Mr Moe, and warned that supply chain planning can no longer focus solely on ocean freight and port operations.

“It’s not enough to plan the supply chain around the ports,” he said. “More and more… the planning [has] to take place… when it hits the port.”

Once cargo arrives, the challenge becomes moving it efficiently through rail, trucking and warehouse networks – areas where infrastructure is often underdeveloped or overstretched.

“How do I get it out faster? Is the rail connection there? Is the hinterland infrastructure working?” he asked.

But in many regions, physical constraints limit the ability to expand capacity further.

“A lot of places around the world, there is no more capacity for ports to be built or expand,” Mr Moe warned.

“And that is what we continue to see as the major hurdle to overcome and to plan the supply chains around.”

He advised shippers: “Keep tracking port congestions, exposures, work with your freight forwarder or your carrier on that and find two, three ways to market, which particularly when it goes really bad is super important.”

Check out today’s News in Brief podcast with Freightos’ Judah Levine, and The Loadstar‘s Gavin van Marle.