Current Challenges in Global Shipping

Current Challenges in Global Shipping

As advised in our previous notices, major challenges in shipping are being experienced across the world. Shortage of truckers, extremely high demand for container movements, limited space availability, COVID-19 and labour shortage in various parts of North America, UK and Europe are all having a compounded impact on global supply chains. We have experienced significant delays from USA, Europe/UK, Asia in general and South East Asia in particular.

In USA, there is a severe shortage of truck drivers. COVID-19 restrictions at ports and rail ramps have further reduced labour availability to meet the ever increasing demand. Winter is also having an adverse impact on normal operations. At the moment, there are massive delays at both East Coast and West Coast USA ports. Not only that, inland rail terminals and rail services within mainland USA are experiencing an enormous surge in demand which is putting a lot of pressure on an already struggling supply chain.

In the past few weeks, we have seen carriers rolling bookings multiple times due to space shortage or last minute trucker unavailability. Equipment shortage itself is another constraint which is adding up to the delays being experienced. In addition, Congestion and Long Beach and Los Angeles ports have worsened even further which is disrupting the entire shipping schedules/vessel turnaround times at these respective ports. There are wait times of almost a month to move the cargo, as vessels are overbooked and space is extremely limited. Looks like these issues will continue well in to the first few months of 2021.

In UK, the situation isn’t very good either. They are experiencing frequent port omissions from all major carriers so the space availability has reduced even further. Carriers have increased their rates significantly and they are likely to stay at higher levels until things improve. Additionally, shortage of labour at ports, a huge backlog of containers waiting for vessels to load, lack of hauliers and COVID safe work practices which are being implemented at ports/container terminals are slowing down cargo movements. Vessel turnaround times are much higher than normal and terminal productivity levels have reduced substantially.

From Europe, we have experienced 40’ High Cube equipment shortage particularly in the German port of Hamburg. Space availability is another issue in Europe but its not as bad as USA. Transhipment services are at a greater risk as they stop in Singapore/Malaysia which are very congested too. This is adding more load on to direct sailings which are overbooked to a particular extent.

From China, it is expected that the space situation will worsen further during January as we enter the Peak Season before the Chinese New Year. Rates are likely to go up further. There is a lack of empty equipment availability in smaller Chinese ports which has made feeder vessel operators suspend some of their sailings. Moving shipments out of these areas by truck to major ports will increase costs and stretch the available trucking capacity. We anticipate the situation to improve only after the Chinese New Year.

From India, most of the carriers have either limited their bookings or have no space whatsoever. Part of the reason is the lack of empty equipment availability as COVID restrictions there disrupted the equipment balance. Another contributing factor is the current space situation in Singapore/Malaysia where the exported Indian containers tranship. It doesn’t look like the situation is going to improve any time soon.

From Malaysia and Singapore, vessels coming to Australia have frequently delayed for more than 10 days. These delays and the congestion have resulted in various rollovers of confirmed bookings. Even the Priority Bookings, which are made by paying extra to the carriers, are unable to move on time and are facing delays.

The overall global situation is not improving and with COVID-19 still looming around, we really don’t expect the short term situation to improve much.

It is recommended that you plan your bookings well in advance and account for these delays/issues in your estimations.

We will endeavour to keep you updated with the latest developments in shipping industry.

From our team at Dieterle & Victory, we wish you Merry Christmas and Happy New Year.