There is an adage that when there is a consistent challenge for businesses and their respective supply chains, some provider will find an answer. When such a challenge involves the global container shipping industry, and the response comes from challengers in that same industry, it is something to call attention to.
Bloomberg reported this week that the container ship Melina, operated by Israeli based shipping line Zim, set sail last Wednesday from a port near Shenzhen to transport products to the U.S. West Coast in a little as 12 days. The vessel with a carrying capacity of 4,300 TEU’s is considered quite small by today’s mega-ship standards but represents a new “fast ship” alternative in the current COVID-19 induced shipping crisis. Zim has termed this new service as ZIM eCommerce Xpress (ZEX), custom made for time-Sensitive cargo pegged for online commerce needs.
ZEX service will reportedly involve 5 Sprinter vessels designed to support time-sensitive cargo, taking into account the specific needs and requirements of eCommerce retailers and customers. The service has been targeted for higher volume shipments originating from factories in South China that can command the need for expedited service. The carrier’s logistics affiliate can further arrange for inland intermodal connections to final warehouse or fulfillment center destinations including Chicago, Memphis, Dallas, Kansas City and New York.
The notions of “fast ships” are not new to the industry. Hawaii based Matson Lines. has been offering termed “fast ship” sailings from different Asia or Hawaiian ports for quite some time. The difference now are needs for added supply chain agility from Asia as blank and slow sailings continue to take a toll on inventory carrying costs, or little or no inventory.
With an estimated 25 percent reduction in industry sailing capacity, the increased occurrences of “blank sailings” because megaships cannot be filled to make breakeven operating sailing costs, and with air freight capacity from China still constrained, it is an option that some industry supply chains are indeed seeking.
With July representing the start of the peak summer surge of U.S. or European bound container volumes and with concerns of a second-wave outbreak occurring within these continents over the coming months, the market demand may well present itself. Granted, shipping volumes are still far less than pre-COVID levels, the need for expedited shipping does present itself for certain products such as medical equipment, computers and servers, pharmaceutical and drug compounds as well as other time-sensitive products including online commerce focused goods.
While the cost could be as much as double the cost of existing container movements in volume shipping lanes, the alternative transportation options along with cost of losing a valued customers could be far more costly in terms of market availability, protecting revenue inputs and needs for market timeliness.
There are reports of U.S. airports being completely backlogged with air freight shipments that have yet to be routed to last-mile destinations because of labor and equipment shortages. With virus levels again spiking in certain portions of the U.S., there are once again reports of critical shortages of medical PPE such as face masks, along with cleaning and sanitary supplies. With some hopes of having a coronavirus vaccine available by the end of this year or early next year, there will be a massive need for production equipment and actual vials to produce and distribute to millions of people.
Multiple shipping containers, even on a smaller scale, provide a more efficient means to move volumes of needed products.
Where there is need, there are industry opportunists. Smaller and faster ships may well serve as the COVID-19 alternative for more supply chain agility.
Time will tell.
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