Roughly 13% of the world’s shipping cargo is held up in traffic, according to Sea-Intelligence, an industry research firm in Denmark.
Disruptions along the supply chain and an acute labor shortage are causing the nation’s ports to become severely clogged. With public fear of inflation, product shortages and the holiday season just around the corner, private companies are pressured to work 24/7.
Shipping and logistics companies are in a stressful situation—is that impacting their advertising investment and creative?
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Disruption at the ports is no easy fix
For months, the nations’ busiest ports have been overloaded with ships transporting everything from in-demand consumer goods to manufacturing materials and pharmaceutical products.
On a typical pre-pandemic day at the Los Angeles port, a key point of entry for goods from Asia, there would be no more than one ship at a time waiting to unload. One day last month, there were a record 73 ships waiting in line.
“I’ve never seen anything like this,” said Lars Mikael Jensen, head of Global Ocean Network at A.P. Moller-Maersk, the world’s largest shipping company. “All the links in the supply chain are stretched. The ships, the trucks, the warehouses.”
Port traffic is leading to rising costs and product shortages, which experts say may get worse before they get better. Because of the severity of the situation, the White House has led conversations with private companies to encourage expanded working hours, data sharing and other solutions.
Recently President Biden announced that the Los Angeles port would move to 24/7 working hours. Though this is only one small link in the overall issue, it indicates that the government is pressuring companies to accelerate processes as much as humanly possible.
Companies like Target, Walmart, Costco, Home Depot, Samsung and FedEx have all recently announced new initiatives to move their products from ship to shelf faster. But there is no simple fix here. Even with expanded hours and privately chartered ships, large companies face issues involving full warehouses and a sustained labor shortage.
As shipping companies work hard to move goods quickly through congested ports, how much are they investing in advertising?
In the first three quarters of the year, shipping and logistics companies invested $14.1 million across digital and print in the B2B space. This is down 6% over the same period in 2020, where $15 million was spent across print and digital advertising.
Lower shipping and logistics spending in 2020 appeared to be a case of not needing to advertise due to pandemic restrictions and an increased demand for shipping. This additional decrease in advertising spending is likely due to the slowdown of goods distribution.
The top advertisers in 2021 are: Old Dominion Freight, FedEx, Yang Ming Group, TLI Transco Lines and Georgia Port Authority.
While the White House can facilitate talks needed to negotiate 24 hour service from longshoremen, the next step is to make sure there are enough trucks, trains and planes to transport these goods (and the workers to go with them). This is why we see an increased focus on the dependability of trucking, rail and employment opportunities.
It is unclear how long it will take to recruit more employees and untangle this global logistical mess. Until then, advertising spend is much lower than it was pre-pandemic and ad creative is leaning into employment opportunities and key pain points of business customers.
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