Road freight The shortage of lorry drivers is threatening to lead to higher prices for products as well as UK stock shortages. The haulage industry is one of a number of sectors having trouble finding suitable staff as the economy reopens.
The UK government has temporarily extended lorry drivers’ working hours to try and help the situation. HGV drivers can increase their daily driving limits from nine to 10 hours or change weekly rest patterns on Monday.
But this is not expected to make much difference, the Road Haulage Association believes there is a shortfall of about 60,000 lorry drivers, estimating that some 30,000 HGV driving tests did not take place last year.
Air capacity In air freight we are experiencing a different challenge with capacity shifting at short notice. With passengers slowly returning (PAX) aircraft are suddenly pulled from freighter routes. Capacity remains tight at 9.7% below pre-COVID-19 levels (May 2019) air cargo demand continues to grow as global manufacturing catches up, currently demand is 9.4% above pre-COVID Levels
Capacity is expected to steadily increase, but demand remains high, maintaining the inflated rates.
Sea freight We are not expecting to see a return to normal, and no significant improvement before (Q4) of 2021 at the earliest.
Supply and demand, coupled with a shortage of containers, port closures and congestion continue to create a “perfect storm,” and carriers are failing to provide consistent and reliable lead times, key corridors from Asia to Europe continue to struggle and the average vessel delay is almost eight days.
These disruptions are expected to keep box prices elevated in the coming months. We are still seeing sky-high Far East westbound short-term rate levels and in some cases these rocket further for guaranteed loading.
All major trade lanes are affected with rate levels far exceeding the same period last year. This is the case both for the transpacific and the transatlantic.
Asia-Europe demand is buoyant and capacity is tight reflecting the situation in sea freight. We are expecting to see rail rate increases over the next months and congestion is leading to delays along the ‘Silk Road’, container wagon shortages at crucial border points between Belarus-Poland-Germany are extending route lead times. However reliability, cost and delivery times continue to make rail freight a competitive alternative to sea and air freight.
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