Q&A: Josh Brazil, VP Marketing, project44

Logistics Management Group News Editor Jeff Berman recently spoke with Josh Brazil, vice pressident, marketing, for Chicago-based project44, a technology services provider offering standardized, secure Web service API (application programming interfaces) integrations enabling 3PLs and shippers to connect with carriers in real time. With the vessel, Ever Given, having been dislodged from the Suez Canal at the time of their conversation, Brazil provided Berman with an overwiew of the situation's subsequent impact on global trade and logistics. Their conversation follows below. 

LM: When looking at the impact of the Ever Given situation, from a routing and scheduling perspective, as it relates to the positioning of vessels, what currently are the biggest issues and challenges it presents?

Brazil: For the short term, as it relates to rerouting, and looking at the vessels re-routed around Africa, there were 24 ships that had been planned to re-route around South Africa, with some having started going and others having stopped and done a U-turn, as soon as the Suez Canal got cleared. It really is up to the shipping lines to figure out what they are going to do and how fast they are going to get them through. Those on the route around Africa will take a lot of time. We are hearing from ocean container liners that it can take around six days to clear the backlog around the Suez Canal. Some ports are going to be affected more than others.    

LM: The congestion at United States-based West Coast ports has been an issue for months now, coupled with competition among carriers for limited discharge capacity, too.  How should the events related to the Suez Canal relate to those types of things?

Brazil: This is one of the biggest disruptions in global trade in recent years. It is a huge thing…I don’t know that any bullet was necessarily dodged, due to the length of it. It could have been worse. As far as West Coast ports, the real issue to be looking at—now and in the future—is the lack of empty containers that this is going to cause. If these containers are being stuck at anchorage outside a port, then they are not being returned to Asia. Then, those Asian manufacturers are not going to have any containers to send to the West Coast of the U.S., where there are going to be expensive delays, as [shippers] are going to be paying anything they can pay just to get a container, at this point. That situation will be exacerbated for just getting the goods out of Asia.

LM: How long do you think it may take for this situation to work itself through?

Brazil: It could be months. The supply chain needs equilibrium and continuity.  Any disruption has these ripple effects, and the bigger picture is it is a general supply and demand issue. With everyone staying home, due to COVID, and ordering goods online, it makes for a huge demand side that is generating it all. There is also a lack of equipment and a lack of port operators and people on hand, too, and that goes hand in hand with the whole COVID situation. Is there going to be a third wave of this in Europe? Things are not looking good there as of now with a vaccine not really rolled out there at all.

LM: Between the pandemic, this past winter, port congestion, and the Suez Canal issue, one almost does not need to ask “what is next?” because things continue to be happening. How does the global supply chain adapt and react to all of this?

Brazil: It has been a wild ride. We are starting to look at which industries are going to be affected by this. Consumer prices are going to head up, as companies will pass costs on to them, at some point. Look at automotive, with this ongoing chip shortage hindering global car production.

LM: What about the impact of the Suez Canal situation on the 2021 Peak Season, as it relates to its intersection with available ocean vessel and container capacity?

Brazil: I don’t this will have too many ripple effects further down. I think it is the bigger picture of just supply and demand. There are enough vessels moving around, the vessels are not the problem. It really goes back to the shortage of containers and the ability of the ports to have the throughput to process all of that. It will have to do with container availability more than anything.

LM: What can be done to lessen the pain, or alleviate the situation, as it relates to container availability?

Brazil: Stop ordering on Amazon. When containers are shipped to the U.S. or Europe, they need to be sent back. As long as that system is not working in a well-oiled fashion, they are not going to return on time. If POLA does not have enough workers and drayage to pick them up on time and get them back out, the containers are going to be sitting there.  Port dwell times are really high right now…things are sitting there and are not rotating back to the factories.

LM: What can ocean carriers and shippers take away from this Suez Canal situation, in terms of lessons learned, in the event something like this occurs again?

Brazil: I think that conversation with BCOs has been going on before all of this, really, with the U.S.-China trade war, in which BCOs were really starting to think about diversifying their sourcing to different countries and different regions to not be 100% dependent on what happens in China. Part of the ongoing situation has really snowballed with these recent events.

LM: Had there not been a pandemic, what would the impact of the Suez Canal situation been on the overall health of the global economy?

Brazil: It would have been fine. There is enough inventory to handle shocks like this, in general. I think it is just a combination of all these factors, like a 1-2 punch on a global supply chain that is already strained.

LM: Staying with inventory, cargo stuck in the Suez Canal is going to impact inventory availability for certain products. How do shippers go about handling that situation?

Brazil: It really depends on what you are shipping and how important it is. Some manufacturers may shift to airfreight to get those critical just-in-time parts in. They have always done that to some degree, and we have seen shifts to trucking as well as airfreight. But not everyone can do that as an ongoing affordable option.

LM: When looking at the West Coast port congestion, is there a possibility there is an uptick in freight flows into and out of places like Savannah and Charleston and others?

Brazil: This is something we have been looking into. Some of our customers have been doing that, particularly in the food industry. They cannot wait for these delays, as their goods will go bad. The food sector is always proactive in this, which we call active re-routing…in which they can choose different ports and make that pivot really quickly. It is something done in general and will pick up even more. It depends on what goods you are importing and where you are located in the U.S.

LM: What is your take on what may happen now and say early 2022, when most people are vaccinated and things are back to normal, or closer to it, as it relates to ocean shipping?

Brazil: On one hand, we will return to more normal purchasing habits but there was already this trend of people buying more online. And what the pandemic did was kind of attach jumper cables to that. That will be offset somewhat by people doing more stuff that they have not done over the course of the pandemic.