There are a variety of reasons for the ongoing ULD shortage and it is “extremely difficult” to predict how long it will persist, according to Frank Hung, vice president of sales and marketing for Descartes’ CORE Transport Technologies.
Speaking exclusively to Air Cargo News, Hung said the shortage is worst on the transpacific trade and is the result of the knock-on effects of general supply chain disruption causing hold ups in transport operations.
“Airlines are finding it’s taking much longer for assets to be delivered back to US warehouses after collection by the consignee,” Hung said.
“Backlogs in warehouse operations for both airlines and freight forwarders, combined with transportation issues such as driver shortages and capacity constraints, are also impacting the availability of ULD pallets and containers.”
Hung added that ULD manufacturers are backlogged and despite running at maximum capacity they can’t fulfil the current demand.
Lead times for delivery of new ULDs is at least four to six months.
“Exacerbating the shortage, freight forwarders are running out of warehouse space and keeping ULDs as supplementary storage outside of their warehouses,” Hung added.
“Airlines are trying to combat the challenges by leasing more units, offering incentives for faster turnarounds in the US and expediting repairs.”
Airlines are also struggling to have enough pallets on hand due to delays in their return from customers.
“It’s also difficult for airlines to secure pallets from ULD leasing companies, even though many are willing to pay a premium for pallets,” added Hung.
“The shortage of pallets is going to continue to delay shipments, which will have an impact on the entire supply chain.”
Asked how long the shortage could last, Hung said it was very “extremely difficult” to predict given the uncertainty regarding future lockdowns – especially given the Omicron variant – and the impact that could have on air cargo.
Hung recommended that airlines utilise tracking technology and software, such as that offered by Descartes, to monitor ULDs and automate the demurrage process.
“[Tracking technology] helps carriers optimize the use of the ULD assets they do have by changing the behaviour of agents so they return ULDs on time.
“This provides visibility into the exact location of ULD assets and whose custody they are in at any time, and traces ULD movements easily to clarify any discrepancies.
“Technology also drives better forecasting and planning so airlines can identify ULD shortages before they occur and take proactive action as necessary, such as leasing or purchasing new assets.”
Descartes is not the only company to have noted a shortage of ULDs over recent weeks.
In November, Cathay Pacific director of cargo Tom Owen also noted a shortage of ULDs on the transpacific.
“Backlogs in both our and consignee warehouses, along with shortages of trucks and labour issues, are combining to make this very challenging,” he said.