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Shipping and transport update—7th July 2021

 

Global shipping lines experiencing backlogs and delays
There are estimated to be over 170 million shipping containers in use across the globe, transporting 90% of world’s goods, yet despite this number the effects of Covid-19 have left global shipping lines with backlogs and delays. These delays resulting from labour shortages, reduced logistics capacity, congestion at ports, quarantined cargo & containers being returned empty reducing supply. A situation not helped by the well-publicised grounding of the container ship the Ever Given for 6 days in the Suez Canal, blocking an estimated US$6 billion of freight every day.

 

Shortage of drivers affecting European road transportation. COVID and Brexit impacts.
European road transportation is also experiencing difficulties due to shortage of drivers with almost 20% of needed driver positions being unfulfilled, the UK being particularly hard hit with over 60,000 drivers short, whilst at the same time still learning to deal with, what in many cases are still being determined, customs procedures resulting from Brexit. Finally, the increase in online shopping & in home delivery has impacted the supply of cardboard threatening the availability and cost of the staple of moving, the cardboard carton.

 

How does this situation, which has been described by many as a perfect storm, affect international moving?
• Inevitably with demand outstripping supply we have seen dramatic increases in freight rates, on average global prices have increased 3.5 times over the last 12 months.
• The shortage of containers and the priority given to global consumer goods corporations makes securing bookings increasingly difficult with longer lead times and delays to shipments as they wait for space on vessels.
• Shipping lines are in 2021 reporting a 36% reduction in the reliability of their vessel’s arrival schedules compared to 2020 making deliveries harder to schedule.
• With congestion at ports and the shortage of drivers and hauliers in many locations has resulted in containers spending longer at ports as they wait to be collected, further impacting delivery times.
• In Europe the shortage of drivers is again impacting availability, leading to increased door to door delivery times. Brexit related customs procedures are not yet universally established and understood, continuing to cause confusion & resulting in short notice changes to delivery schedules.

Santa Fe continuously monitors the situation worldwide and keeps you updated of any developments. We use an extensive range of freight providers ensuring you get access to the very best transport solutions. Every move is actively monitored by a Santa Fe Move Consultant providing our customers with the very latest transit information and making sure costs, delay and disruptions are minimised.

 

Will it last?
Much is being done to solve these issues, shipping lines are sourcing more vessels, action is being taken to reduce the shipment of empty containers, governments initiatives are attempting to address the shortage of drivers, the understanding and implementation of Brexit procedures will inevitably improve with time. Yet as countries emerge from lockdown and government introduce recovery programmes, we see that spending continues to rise, it is expected that the global demand for shipping and transportation is expected to outstrip supply for some time to come, these challenges are therefore expected to continue in to 2022 and beyond.

 

Should you have any questions, please contact your Santa Fe representative.

 

Sources

Freight Prices fbxfreightos.com
Evergiven Bloomberg.com
Shipping line reliability Sea-intelligence.com
Shipping Crisis Newstatesman.com forbes.com
Driver Shortage IRU.org, bbc.co.uk
Recovery Programmes UNDP.org

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