Shipping & Logistics update
At these rather stressing times for shipping & logistics, we deem it necessary to share & update with Key Customers & Partners like you, present relevant shipping industry’s insight info focusing on facts playing on the chaotic Global Trade & Supply-chain logistics situation are enduring. More so, the outlook we should be rationally looking at for the near future.
MAIN FACTORS OPERATING IN THIS CRISIS
It is now obvious that the myriad of Carriers/truckers/railways, Terminals, DCs…-you name it; are yet far from coping with present over-demanded and saturated services, all around.
On the contrary, the extreme congestion at above noted shipping and logistics infrastructure is progressively impacting negatively by biting on the overall system’s capacity, daily shrinking it as a result of ever longer turnaround times which continue to expand, with no clear limit in sight, at the very freight means level: ships, terminals, rails, trucks…
COVID’s labour absence toll on key/strategic infrastructure, equally adds heavily to this negative scenario.
In fact, mounting troubles that were somehow restricted to the east-west trades are now spreading: we are witnessing how what already seen in Asia, Europe, India and the USA is inexorably reaching and affecting Africa, Central & South America as well as Short-Sea shipping markets (Intra-Europe, Inra-Asia, Caribbean…) thus triggering the freight rates & surcharges increases, widely across the board.
As a result, the shortage of empty containers remains a challenge at every trade + region, being acknowledged as “industry-wide”.
US, CHINA and INDIA together with few other Asian countries and Turkey, continue to be the worst cases, both on cntr availability and progressive congestion at every logistic infrastructure and key operators’ services, with past four and coming three weeks said to see the “largest impact” because empty containers shipping back to Asia are delayed and imports are lower” by a top-ranked Carrier’s executive intervention.
Main HUBs/transhipment ports are collapsed: Singapore, Antwerp, Rotterdam, H.Kong, Sines, Malta, P.Klang, Panama, Cartagena, Algeciras, Tangier, Valencia…
The largest commercial Ports are lagging 4-5 week behind former standards on cntr handling cycles.
Schedule reliability is impacted by two main factors: recent delays from Europe via Suez Canal; and lower port productivity, especially on transpacific and European trade routes.
A SHORT-TERM OUTLOOK
-Vessel cancellations and omitting continues with short notice or without prior notice.
-Latest US and EUROPEAN retail industry stocks reporting severe reductions, is pointing to a stockpile Replenishment round of Orders that would keep demand on the high side, preventing any short-time ease to the situation.
-Needless to say that Carriers, while continuing to struggle to recover lost schedules, are comfortable increasing every charge and limiting every commercial term in a clear bet to get as higher revenue as allowed in the market. n itself, a policy –being honest, truly difficult to contest given their dominant position -at the moment.
-Container spot rates are beginning to head upwards again across all trades from already elevated levels, as carriers reduce their commitment to contract volumes in favour of much higher FAK rates.
-There is growing evidence that there will be another big spike in transpacific spot rates in the coming weeks, with the US National Retail Federation (NRF) saying it expects import volumes to be 14% higher this month than April last year.
-We are to believe any improvement to present status would not come before we are well past the summer.
OUR ADVICE TO BEST ‘CRUISE’ THE SITUATION
Being such the scenario industry & economists are depicting, we continue suggesting to focus in:
-Work with comprehensive & as anticipated as ever-possible planning.
-Share your Orders’ delivery info with all relevant participants fm minute #1.
-Acknowledge/take an extra 40-50% time on announced Carrier’s transit times: Sailing calendars & schedules are not to be trusted.
-Do not commit to delivery calendars.
-Regularly update your shipping & logistics Budget.
-Keep close contact with EccoFreight Team to be fully and timely aware of rates and charges increases + implementation on your active trade lanes.
At Ecco Freight we are continuously working with international agents and carriers to generate alternatives and ensure as much space as possible, checking the international situation at all times in order to meet your needs.
Trusting this updated report on the situation helps you and your biz Partners protect and adapt your ongoing and planning operations.
