The high demand for space and ongoing congestion at ports continues to challenge shipments from Asia and the Indian Sub-Continent. The effects of which are expected to persist until at least the Chinese New Year.
No Let Up In Sea Freight Peak Period Disruption
The disruption of the last 18 months is expected to continue for the foreseeable future. The recovery of the industry continues to be hampered by supply chain bottlenecks as port congestion across the world drags on. We are experiencing a spike in demand from retailers in the UK, Europe and the US rushing to get products shipped by the end of the year. While demand remains high, and with inventories needing to be replenished after the Christmas period, we expect there will be a further rush in demand in the run up to Chinese New Year holiday, which falls on 1 February 2022.
The availability of space is being made worse by pandemic-induced restrictions in port and haulage operations, leading to less reliable services, congested ports and longer delays and dwell times. Capacity on the Asia to Europe shipping routes is still limited and experiencing longer transit times, berthing delays outside ports, and longer dwell time inside ports. All of these factors have resulted in the average transit time being significantly longer than we’ve experienced during the peak period in previous years. The level of disruption means that low schedule reliability will continue for some time yet.
European ports remain heavily congested due to port staff and HGV driver shortages. These factors have resulted in full inland terminals which are unable to accept new arrivals and an increasing number of ship diversions resulting in booking cancellations, due to the last-minute decisions by carriers to skip ports. The Port of Felixstowe is intermittently refusing empty container restitution as a tool for managing congestion as we continue through peak season.
Ocean freight rates are expected to remain high and are likely to lead to increased consumer pricing. Eventually, post Chinese New Year in 2022, there is the possibility that the larger swings in demand could alleviate, allowing global supply chains to normalise.
Energy Transition Fee Applied to Port of Felixstowe
Earlier this year, DP World, who runs the ports at London Gateway and Southampton introduced an Energy Transition Fee. We have been informed that the Energy Transition Fee is also being introduced to the Port of Felixstowe from January 1st 2022. The fee will be £8.75 per container. The port will pass this charge on to the party handling the customs clearance entries and the associated charges such as ISPS and infrastructure changes.
