How Supply Chain Disruptions Affect Freight Shipping: Lessons from Recent Events

Supply chain disruptions have significantly impacted freight shipping, exposing vulnerabilities in production timelines, delivery schedules, and costs. Events like the COVID-19 pandemic, geopolitical conflicts, labor shortages, and natural disasters have highlighted the fragility of the global supply chain.

This article examines the effects of these disruptions on freight shipping, key lessons from recent events, and strategies for navigating future challenges.

The Impact of Supply Chain Disruptions on Freight Shipping

Freight shipping, the backbone of global commerce, faces significant challenges during supply chain disruptions, creating a domino effect that disrupts logistics.

1. Port Congestion and Delays

Port congestion is a visible result of disruptions, caused by surging demand, labor shortages, and capacity issues. Major ports like Los Angeles and Shanghai have seen ships waiting weeks to unload cargo. This bottleneck delays deliveries, raises costs, and impacts all supply chain players.

Recent data highlights this ongoing issue—at the Port of Long Beach, average import dwell time reached 14.7 days, with a median of 10.3 days.

Lesson: Diversify ports of entry or explore alternative routes to reduce the risk of delays at congested hubs.

2. Increased Shipping Costs

Supply chain disruptions often drive up freight rates. Shortages of containers, limited trucking capacity, and labor strikes push carriers to charge higher premiums. During the COVID-19 pandemic, shipping a 40-foot container from China to the U.S. West Coast surged by over 400%.

The Red Sea crisis further strained shipping costs, with spot container rates from Shanghai to Europe rising by 256% between December 2023 and February 2024 due to Houthi attacks on Red Sea routes.

Surcharges like peak season fees and congestion charges add to these costs, challenging businesses—especially those relying on just-in-time delivery models—to meet demand amid rising logistics expenses.

Lesson: Secure long-term contracts with carriers or leverage freight forwarders to manage cost volatility effectively.

3. Shortages of Shipping Containers and Equipment

The pandemic disrupted global container availability, leaving many stranded at ports or in countries slow to reopen, causing delays for businesses needing to move products. Equipment shortages—like chassis, cranes, and trucks—further compound backlogs, slowing down operations.

In Asia, equipment shortages persist, with geopolitical tensions forcing route diversions and putting downward pressure on freight rates.

Lesson: Partner with 3PL (third-party logistics) providers to access broader resources and container management systems for smoother operations.

4. Labor Shortages and Strikes

Labor shortages and strikes have significantly disrupted freight shipping. Shortages affect dockworkers and truck drivers essential to moving goods between ports and distribution centers.

Recent U.S. labor strikes, from Maine to Texas, impacted 36 ports and 45,000 dockworkers, highlighting the vulnerability of the industry to workforce issues. Such disruptions delay shipments and increase costs as companies struggle to meet demand with limited manpower.

Lesson: Collaborate with logistics partners to create backup plans for labor shortages, including automation or technology to reduce reliance on human resources.

5. Geopolitical and Natural Disasters

Geopolitical conflicts and natural disasters are major disruptors of freight shipping. The war in Ukraine has significantly affected European shipping routes, increasing fuel costs, altering freight lanes, and raising security concerns.

Natural disasters like hurricanes, floods, and earthquakes further disrupt supply chains by closing ports, damaging infrastructure, and halting freight movement. Hurricanes along the U.S. Gulf Coast, for example, have caused severe port and shipping delays.

The Red Sea crisis reduced container shipping through the region by 90% between December 2023 and February 2024, forcing vessels to reroute around the Cape of Good Hope, increasing time and costs.

Lesson: Diversify supply chains geographically to maintain access to multiple sourcing locations and shipping lanes, reducing vulnerability to these disruptions.

Lessons Learned from Recent Supply Chain Disruptions

Recent disruptions have highlighted key strategies for improving the resilience of freight shipping and supply chains.

1. Build Flexible and Resilient Supply Chains

Over-reliance on a single region or supplier left many businesses vulnerable during crises. Diversification of suppliers, transportation modes, and distribution centers reduces the risk of localized disruptions.

Leveraging AI-driven forecasting and advanced planning tools enhances flexibility, enabling faster responses to shifts in demand or supply conditions.

2. Embrace Technology and Real-Time Visibility

Technology minimizes disruption impacts by providing real-time tracking and visibility. Tools like GPS, IoT sensors, and digital freight platforms allow shippers to monitor goods, predict delays, and adjust plans as needed.

Predictive analytics further strengthens resilience by forecasting disruptions, giving businesses more time to prepare.

3. Strengthen Partnerships with Logistics Providers

Partnering with reliable logistics providers is crucial for navigating disruptions. Strong relationships with freight forwarders, carriers, and 3PL providers ensure access to multiple transportation networks and resources, helping to overcome capacity shortages and bottlenecks.

Seek agile logistics partners experienced in managing crises. Open communication and transparency are essential to keeping all supply chain stakeholders aligned.

4. Prepare for the Unexpected with Contingency Planning

Disruptions highlight the need for robust contingency plans. Businesses without backups scramble when supply chains falter. Effective plans should include alternative suppliers, emergency inventory storage, and strategies for rerouting freight when traditional routes fail.

Develop disaster recovery plans to address common risks like port closures, labor strikes, and natural disasters, ensuring operations continue smoothly during disruptions.

Conclusion: Preparing for a Disruption-Proof Future

While supply chain disruptions are unavoidable, their impact on freight shipping can be mitigated with strategic planning. Building flexible, resilient, and technology-driven supply chains is essential to navigate unforeseen challenges.

By focusing on diversification, real-time visibility, strong logistics partnerships, and contingency planning, businesses can reduce disruption effects and maintain smooth freight operations, regardless of future challenges.