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Shipping and transport update—September 2021


The challenges in global shipping continue

The cost to send a container from Asia to the west coast of the USA is now 13 times higher than in 2019, reaching a record price of US$20,000 for one 40’ container, with the global average increase of 8 times higher when compared with pre pandemic era. Yet the increase in the cost of shipping is just one of the challenges facing the international moving industry.

Congestion at ports and delays in shipping

The surge in demand for shipping from the end of 2020 combined with the reduction in available labour has resulted in congestion at many ports across the globe with vessels queuing offshore pending unloading, as we progress through 2021 this situation continues. In the USA with the Thanksgiving holiday season (the peak buying season for consumers) approaching, many importers are moving early to ensure they have required stock to respond to increasing demand. The acceleration in Delta-variant COVID-19 outbreaks in several countries has further slowed global container turnaround rates, which when combined with severe weather outbreaks in Asia and The USA has further disrupted shipping timings with less than 40% of vessels globally meeting their published schedule in July.

Driver shortage is a global issue

Road transportation is a key function of international moving, be it moving effects within country or region or moving effects arriving by sea away from the port. The severe shortage of truck drivers in the UK is also being experienced globally. Whilst governments are being pressed to find solutions to the problem, companies are seeking their own solutions to attract drivers such as major UK retailer Tesco offering a GB£2000 sign on bonus or US giant Walmart offering double the median driver salary. This shortage is making it difficult to source transport solutions, a high level of late notice cancellations and changes of schedule further exacerbating the difficulties of committing to dates for collection and delivery.

Warehousing

Key to moving goods is warehousing, enabling effects to be stored pending on transit and delivery. The growth of e-commerce is fuelling the demand for warehousing space and fulfilment centres. It is estimated that an additional 300 million square feet of warehousing space will be needed in Europe by 2025. With the uncertainty in shipping and with transportation driving the need for storage during a move moving companies are facing ever increasing competition for available space.

What is Santa Fe doing to help?

Santa Fe continuously monitors the situation worldwide and keeps you updated of any developments. Through its global network Santa Fe has access to multiple freight suppliers giving its customers the widest choice of possible solutions. We will assist with advance planning ensuring that the best timings can be agreed and that all required documentation in place minimising the risk of unforeseen changes. Even though charges may increase, Santa Fe will provide clear and transparent pricing for every move, outlining schedules, outlining different scenarios and utilising different methods of transportation ensuring that there are no hidden costs. Through its Customer Portals and via its Move Consultants will ensure the schedules and latest timings are available to its enabling customer flexibility and minimising uncertainty.

What is the outlook?

There are signs that freight prices have steadied during August as shipping lines continue to seek solutions to meeting demand, including utilising less congested ports and sourcing of additional containers, Hapag -Lloyd having bought an additional 450,000 containers in the last 12 months. Ports are seeking to increase capacity by accommodating new “mega” vessels and introducing larger cranes. However, with a number of countries still looking to contain Delta variant out breaks and continuing supply chain issues such as a global shortage of microchips causing the world’s largest car manufacturers to cut production by 40% every indication is that the challenges impacting Moving will continue into 2022.

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

Sources

Freight Prices Balticexchange.comBloomberg.com
Shipping line reliability Sea-intelligence.com
Driver Shortage Forbes.combbc.co.uk
Warehousing FT.com
Containers WSJ.com
Car production NYtimes.com

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