Ningbo port formally reopens with congestion easing, air freight operations in China are still significantly disrupted and the UK haulage crisis is reported across the media to be a ‘big problem’. Here is a summary of this week’s main industry news.
Ningbo Port Formally Reopens
The Chinese government has resumed normal operations at the Covid disrupted terminal at Ningbo port. The situation is improving with congestion easing at both Ningbo and Shanghai ports. Fewer vessels are queuing at the ports and fewer vessels are being rerouted to avoid schedule delays. It is expected that the backlog will not be fully cleared until September and that carriers will continue to divert some of their vessels in the next week to avoid the remaining port congestion.
Air Operations in China Still Significantly Disrupted
Although freight flights are slowly resuming at the airports impacted by government closures in response to the recent Covid-19 outbreak, the disruption continues at Shanghai, Ningbo, Nanjing and Hangzhou airports. Many airlines are still not taking bookings until they have cleared outstanding backlogs. The resulting reduced capacity has now pushed air freight rates up across China by around 10-20% depending on the carrier. We expect that the disruption at affected airports will continue for at least a few weeks until backlogs are fully cleared.
PFE is using alternative airports in both mainland China and Hong Kong to mitigate the delays being experienced. We are also operating air freight shipments out of Zhengzhou instead of Shanghai for the next week until the situation is a bit clearer. We will keep you updated on any developments as and when they happen.
UK’s Haulage Crisis is a Serious Problem
There have been many reports in the press this last week about the growing concerns across multiple industries about the haulage crisis in the UK. The Road Haulage Association (RHA) estimates that there is now a shortage of more than 100,000 drivers in the UK. Retailers, manufacturers and restaurant chains are already reporting low stock, site closures and delivery cancellations of some product lines. Consumers have been warned that they are likely to experience stock scarcity, long delivery times and price rises later this year.
The haulage industry is struggling to find enough drivers to meet demand, as a result transport rates are rising significantly. Retailers offering better pay and conditions and bonus sign-up payments are adding to the pressure. Hauliers have responded to the situation by imposing surcharges to offset the cost of retaining their drivers. It is expected that the additional costs for retailers will be passed on to consumers and higher prices are expected later this year.