Demand continues to rise as retailers rush to place Christmas orders earlier than usual, driven by escalating shipping costs and delays that threaten timely deliveries.
The global supply of shipping space and containers has been constrained due to disruptions from Houthi attacks in the Red Sea and resulting diversions around the Cape of Good Hope. Insufficient capacity, combined with a recent spike in demand has caused rates to soar as well as creating supply chain challenges with increased congestion at origin ports, worsening delays and disruptions to sea freight services.
Retailers Bringing Forward Orders
Businesses are shipping their Christmas cargo early this year. Traditionally, retailers begin importing goods for the Christmas shopping season between late summer and autumn. However, with no end in sight to the disruptions in the Red Sea, companies are adjusting their strategies. To ensure shelves are stocked for Christmas, retailers are advancing their shipments to account for any potential delays while the goods are en route.
Capacity Constraints Driving Up Rates
Increased demand and space challenges, caused by vessels deviating from schedules and returning late to origin ports, has led to longer rotations and impacted outbound traffic from Asia. Insufficient capacity for these longer routes has resulted in shipping costs escalating, with sea freight rates still rising this week and at their highest levels since 2021.
Pressure at Ports Adding to Delays
Vessels are regularly arriving at ports on unscheduled days, leading to berthing clashes and significantly longer waiting times at ports. Port congestion in Asia is worsening due to the build up of cargo, leading to pockets of equipment shortages in China, Taiwan, Cambodia and Thailand. Equipment availability is becoming increasingly tight and varies daily based on vessel arrivals and the discharge of empty containers. At Singapore port, critical congestion has forced some carriers to skip scheduled port calls, further disrupting downstream origin ports and impacting the reliability of Asia-Europe services.
Outlook
We expect demand to further increase in the coming months. During this challenging period there is the potential for port congestion to worsen and significantly longer transit times are anticipated. While we expect delays and frequent schedule adjustments, we are committed to minimising disruptions and will provide regular updates to ensure you stay informed.
Should you have any questions or concerns about your shipment, please get in touch with our Customer Service Team on 01376 533039.
