It’s not a matter of if shipping exceptions will occur in a supply chain; they surely will. And when an exception in shipping occurs, how it’s managed can make all the difference in achieving resilience and preventing ripple effects from wreaking havoc throughout the global network.

What does “shipment exception” mean? To a freight forwarder, logistics service provider, beneficial cargo owner (BCO), or shipper, an exception means that something has gone awry while the container and its contents were in transit, causing a change in the schedule that most likely will result in a delay in delivery.

Forwarders and LSPs want to be the first to know of any exceptions. They don’t want to make educated guesses about where their clients’ containers are, nor do they want to spend time jumping from site to site among carriers to track containers manually. Most of all, they never want to be in a position where they hear about an exception from a beneficial cargo owner or shipper.

BCOs and shippers, on the other hand, only want to know, “Where is my shipment, and when will it arrive?” When an LSP or freight forwarder cannot provide timely updates--especially in the event of a shipping exception—BCOs and shippers are likely to question why they’re paying for a service that is not providing value. This is why more and more companies are making the smart move and using container tracking APIs (application programming interfaces).

This article looks at what causes exceptions to occur in container shipping, the challenges of a reactive approach to exception management, and how taking a proactive stance of exception by management using shipping container tracking APIs yields many benefits. When container tracking is solved, all parties can focus more strategically and proactively on resolving and managing exceptions.

What Exceptions Occur in Container Shipping?

Ocean freight-specific shipping exceptions happen for several reasons, including two related to the schedule changing:

• Containers get rolled: Due to overbooking, mechanical problems, or weather issues.  
• Omitted ports: A “blank sailing” occurs when carriers cancel the entire route or decide to skip certain ports for various reasons, including excessive port congestion, labor strife, weather, vessel maintenance, or simply to keep the rest of the sailing on schedule.

In general, carriers don’t provide great communications while in transit and rarely do they update their customers of these events. If and when a carrier knows they’re carrying containers for a prominent shipper/BCO, they might be forthcoming with a specific update—but probably not.

Some additional reasons why shipping exceptions occur include:

• Required documentation is missing: This is especially important when dealing with ocean freight, which often includes additional paperwork that local or ground-based shipments do not require.
• Compliance/Customs issues: Border inspections, missing data or documentation, improper labeling of hazmat materials, lack of permits/licenses, and incorrect payment of duties and taxes can also lead to shipping exceptions.
• Forces beyond control: Inclement weather--such as typhoons, hurricanes, and tsunamis--a ship stuck in a canal, civil unrest, and too much congestion at ports can lead to exceptions in shipping. Road construction, inland weather, wildfires, and other “acts of God” can affect port operations and drayage services needed to complete delivery as well.
• Labeling issues: A missing, damaged, or unreadable label on an ocean shipment very well could lead to a delay or even a return to sender.
• Holiday closures: U.S. federal holidays, certain international holidays, and countless country-specific holidays and observances (Japan Week, for instance) could disrupt shipping schedules and port operating hours on or around those days.
• Recipient not available to accept shipment: This was common during the earlier stages of the pandemic as mandates forced non-essential businesses to close or operate with restricted hours.

Without end-to-end visibility and an ability to communicate in real-time,  stakeholders are in the dark and blind to most instances of exceptions in shipping.

Challenges of Reactive Exception Management

Many BCOs and shippers in the container industry are old-fashioned and resistant to change and technology. To them, manual data input is just part of the job. Integrating said data into their existing systems requires too much time and resources. Here is a familiar sentiment: “Hey, we’re a small company with no resources to ingest data, and there’s too much code work involved. Besides, ocean carrier data is a black box; we don’t know if it’s right.”

They run into so much frustration when dealing with carriers that they just accept “this is the way it is” and resign to accept these broken ways, which leaves them in a reactive mindset when managing shipping exceptions.

Several things prevent them from taking a proactive approach to managing exceptions in shipping, including:

• No visibility at all.
• Inability to get real-time, quality, accessible data around container activity.
• No integration of that data into a system of record, such as a TMS, WMS, ERP, etc.
• No ability to cleanse/ analyze data, then communicate to shareholders promptly.

Few would argue that the goal is to have a more advanced digital supply chain, which rests largely on the quality of the available tracking data.

“If you want smart exception identification, you need good tracking data. If you want to reduce demurrage fees, you need good tracking data. If you want to understand the performance of carriers, facilities, and trade partners, you need good tracking data, says Kyle Henderson, CEO of VIZION. “And this data needs to be accessible, complete, and available. Historically, you wouldn’t get data from a carrier unless you were one of their largest customers. If you got data, the format was very unfriendly, and you would only receive 60% of the data you needed.”

The story is much the same for the LSP and freight forwarder, with some notable additions:

• They have trouble placing bookings with ocean carriers/finding capacity on vessels.
• They can’t quickly answer the question, “Where’s my shipment, and when will it arrive”?
• OTIF rate plummets when freight is late, which leads to fines and also raises the risk of leaving store shelves bare.
• Might have to use more expensive modes of transportation  (air, rail) to get products to destinations on time.
• Increases BCO/shipper costs because they will need to provide buffer stock.
• Lack of data also creates operational inefficiencies in warehouses.

In short, for all stakeholders, there will be panic that will lead to increased customer service activity and additional costs resulting from poor information. Poor communication with carriers only exacerbates the situation when shipping exceptions happen.

The modern approach to manage exceptions in shipping and help shippers and BCOs deliver on increasing customer expectations is to take a proactive approach through automation and container tracking APIs.

Benefits of Proactive Management by Exception

As explained by Supply Chain 24/7, prioritizing shipping exceptions—or the “management by exception” approach—“means knowing how to respond when to respond, and the best way to respond, to eliminate the risk of disruption, and handle adverse events. Even changes within capacity can require exception management, rerouting shipments, and redefining the loads accordingly.”

Any technology platform for management by exception must include:

• The ability to define how to handle shipping exceptions.
• Transaction validation helps flag errors and issues.
• Real-time alerts and notifications that are auto-distributed to subscribed stakeholders.
• Data quarantine ensures quality and accuracy.
• Robust reporting and analysis, which provide visibility into partner performance and crucial metrics.

VIZION’s container tracking API does all that and more. From a BCO/shipper’s perspective, API technology provides:

• More reliable/accurate ETAs.
• Visibility across all carriers in one platform—a single pane of glass.
• Control over their data so they can plan effectively to create operational efficiencies.
• Leverage to hold ocean carriers, freight carriers, warehouses, and distribution centers accountable.
• Efficient information sourcing to make better decisions and assist with root-cause analysis.
• A proactive approach to identifying and mitigating detention & demurrage.

From the perspective of a freight forwarder and LSP, APIs provide the end-to-end visibility needed to respond proactively to shipping exceptions in uncontrollable situations. This, in turn, offers the following benefits:

• Access to clean, standardized data across all carriers, showing the status of all milestone events.
• Data can be pulled or pushed into their interfaces through an adaptable data pipeline.
• Improves the customer experience and boosts retention.
• Helps BCO/shipper customers control costs.
• Improves accuracy by reducing manual, error-prone data entry.

VIZION APIs enable real-time alerts for blockages and shipment exceptions, along with the ability to address them immediately at any point from the time of loading until container delivery at destination. Along the way, APIs generate daily or hourly reports on container status updates.

Get Proactive: Take Control Of Shipping Exceptions with Container Tracking APIs

It’s never been more challenging for BCOs, shippers, freight forwarders, and LSPs to manage shipping exceptions and know where ocean freight is, when it will arrive, and the reasons for any delays. Our VIZION container tracking API automatically pushes the most complete, standardized, and detailed container tracking events to any TMS, WMS, ERP, other software systems, or spreadsheets. The ease of having access to standardized data through a single pane of truth rather than manually tracking down container status information enables all stakeholders to focus on growing their respective businesses. VIZION maintains a 99.9% uptime performance in our data integrations and covers 98% of global ocean carriers. That’s how we fuel machine learning that drives continuous improvement. When it comes to managing exceptions in shipping, APIs are technology you can trust. Check out our Use Cases and ROI potential for BCO/shippers, freight forwarders, and logistics service providers. Then, schedule a demo at your convenience.