Weekly Update – 24.09.2021

Weekly Update – 24.09.2021
September 24, 2021 Hannah Marshallsay

With Golden Week on the horizon, Sea Freight services are mired by increased port congestion in Europe and the US. Air Freight rates soar to the highest yet this year and there is no let up to disrupted services from the Indian SubContinent as the Covid-19 lockdown in Sri Lanka is extended. Here is a summary of this week’s main industry news.

Golden Week to add to Shipment Challenges from China

The Golden Week holiday, from 1st – 7th of October, has a significant impact on global supply chains originating in China as offices and factories are shut during this week. Ports will operate as normal, but customs services will work with a skeleton staff on reduced hours. The combination of heightened Christmas demand with Golden Week closures will cause additional congestion and shipping lines will introduce blank sailings creating further capacity challenges for moving goods out of China.

Covid-19 Outbreak Impacts Transport in Xiamen

Xiamen in SouthEastern China is experiencing a Covid-19 outbreak with the government tightening containment controls and imposing restrictions across the region. While ports are currently still functioning, trucking is being seriously impacted as long distance transportation services have been suspended and drivers are subject to strict testing requirements. The distribution of some goods from factories to ports are therefore being impacted. We will keep customers updated with further news at the earliest opportunity.

Port Congestion in US and Europe Increases

The level of congestion at EU and US ports is worsening. The disruption is being caused partly by the misplacement of empty equipment, but mainly as the result of  productivity challenges at ports from shortages of labour resulting from public health measures and a lack of staff in sectors such as road transport.

It has been reported that port congestion is so acute in the US that there are up to 65 vessels waiting outside two of America’s biggest ports – the ports of Los Angeles and Long Beach, California – which handle 40% of all cargo entering the country. Severe port congestion in Europe is creating waiting times of up to 10 days for vessels coming into the key hub ports, Hamburg, Rotterdam and Antwerp. 

In the UK, the port of Felixstowe is experiencing congestion with increasing numbers of ships waiting to berth. This congestion is leading to changes to port rotation with vessels being redirected to other European ports before returning to Felixstowe.

Air Freight Rates Soar as Capacity is Squeezed

Capacity is being squeezed on air freight services from Asia to Europe as a result of large swathes of regular scheduled capacity missing from the market due to Covid-19 restrictions, impacting flight availability and a shortage of ground handling staff. The availability of space is tight and will be pressurised further over the coming weeks, driven by the hurried distribution of products by global brands ready for the Christmas retail season. As a result of the continued reduced capacity, along with increasing seasonal demand, air freight rates have risen to the highest levels seen this year.

Covid-19 Disruption Set to Extend in Sri Lanka

Due to increasing Covid-19 cases the government in Sri Lanka has extended its full lockdown until 1st October 2021. Whilst still operational, strict epidemic prevention measures are being actioned at the hub port of Colombo, which has resulted in serious labour shortages and congestion at the port. The congestion is preventing the feeder network from working optimally and impacting shipments throughout the Indian SubContinent region. We expect to see order backlogs and shipping delays on shipments from the area continuing over the coming weeks.

Haulage Industry Welcomes New Testing Processes

Industry bodies have welcomed plans to simplify the process for qualifying as a HGV driver as a solution to the current driver shortages in the UK. People wanting to enter the occupation will no longer have to go through staged testing and private sector examiners will be able to undertake parts of the examination which will increase the capacity for testing. However despite this positive news, the haulage industry has cautioned that this pledge needs to be actioned quickly in order to make any difference to the driver shortage crisis ahead of Christmas. There have been more reports in the press this week of fuel deliveries to forecourts being impacted and consumers are being warned once again to shop early for Christmas. 

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