But if you are organised and book now it is possible to get goods for Christmas, space dependent, speak to us today, as ongoing sea freight and container collection difficulties will only add to delay and complications.
We are navigating our customers through this period as best we can, keeping them informed of the situation at every stage of their booking process, from enquiry to delivery, enabling them to make their shipping decisions based on cost and delivery timetables.
The marketplace has reached saturation point, so we are warning all customers to plan for delays and increased costs. Container haulage costs have more than doubled and the situation is showing no signs of easing.
The lack of availability and rising shipping costs, means more risk of ‘flip-flopping’ – where a rate is agreed, and vessel booked, only to be told at the last minute that the shipment is going to be delayed.
And everyone is well aware of the UK driver shortages, the following scenario is an illustration of the implications –
‘Your container arrives at the port of Southampton, and it’s just got to go to Newcastle to complete the final leg of its journey.
But the haulage company is no longer able to handle it, citing a 3-week delay until a driver can collect. Containers can remain ‘in port’ for five to seven days free of charge (this has historically been ample contingency for handling containers and at TPS we secure 7 free days.). After this time, it’ll be charged quay rent and demurrage.
So the final mile delivery, which was priced at £485 three months ago, is now £950 – just for the road haulage, and there is going to be an additional £1,000 worth of quay rent and demurrage on top, and that may just be for 1 of 10 containers that you have shipped.’
This is not just affecting the UK – America, France and Germany are all suffering with a shortage of drivers and Poland are over 100,000 short of HGV drivers.
Training programmes are the best way out of the HGV driver shortage scenario, but there is no quick fix.
Sea freight shipping delays and high rates continue due to ongoing pandemic-related disruption, non-stop demand for ocean freight from Asia to the US, and lack of capacity.
As carriers move capacity from secondary lanes to transpacific ones, things begin to get held up on lower-profile routes.
Demand at this time of year is also high, with importers and exporters willing to pay premiums in addition to rates just to keep their goods moving.
Air freight demand has increased as a result of the sea freight situation. But capacity is very tight, Boeing is forecasting that it will take another two and a half years for global aviation to return to pre-pandemic levels. Long-haul international passenger routes – the main capacity for air cargo carriage – will take the longest to recover, partly due to government restrictions related to the pandemic.
Looking ahead to 2022, the amount of belly cargo capacity available in a re-configured industry could be significantly lower than pre-pandemic levels, and the days of the preighters are probably numbered. These are passenger aircraft operating in cargo only mode, and kept planes and pilots flying and essential goods moving during the pandemic. But they are time-consuming to load and unload – it can take four to five hours to load a preighter, whereas it takes 35 minutes to load a regular freighter. Furthermore, preighters struggle to be cost effective with the price of oil rising from $35 to $75 per barrel and still rising – it is estimated that to make a preighter breakeven it needs US$10-11 a kilo, and this yield is becoming very difficult to obtain.
Finally, Rail freight hasn’t escaped pandemic disruption we are seeing congestion and extended transit times along the Silk Road with delays of 10 -16 days. Due to rail freight’s booming popularity, demand shot up last year when the Covid crisis began and shippers looked for alternatives to heavily disrupted air and sea services.
The boom in e-commerce continues, there was a 60% annual increase in sales by third party sellers on Amazon’s marketplace last year.
However, despite potential delays and high freight shipping costs, there are a few steps importers can take right now:
- Buffer your freight budget and transit time for changes. Costs due to unforeseen delays or limited capacity can arise, so be prepared. Freight forwarders are trying their best to move goods on schedule without additional fees, but in this unstable period, delays and additional charges can occur out of forwarders’ control.
- Explore warehousing options to mitigate port delays and costs and the effects of lowered demand.
- Pay attention to the profitability of your goods and remember to factor in freight costs.
- Consider which shipping mode is best for you right now. When forwarding freight each mode of transport has its own benefits and drawbacks. Choosing the right mode for your goods would be based on price, speed, convenience or cargo safety.
- Book now if you can. Contact us, to get goods moving as quickly as possible.
- Communicate regularly with your freight forwarder. This is more important than ever – staying in touch means you’ll have a better handle on your transit time and stay on top of any changes that may arise.
- Make sure that you have manpower to accept your goods at arrival. This will minimise delays.