Challenges to sea freight services continue with vessel diversions around the Cape of Good Hope impacted by bad weather, compounding difficulties for the shipping industry.
With no end in sight to the Red Sea crisis, Asia-Europe vessels are continuing to divert around the Cape of Good Hope to avoid attacks by Yemen’s Houthi group. The extended route between Asia and Europe is creating capacity issues with the current supply of vessels insufficient for the current demand, driving rates to highs not seen since the pandemic.
Demand Exceeding Supply
We are experiencing an early peak season driven by Western retailers and manufacturers ordering goods earlier and in larger quantities to avoid supply chain issues. Retailers are aware of the current market challenges and are keen to avoid running out of stock during the Christmas season. This surge in demand has outpaced supply, with all available ships in operation.
Increasing Pressure at Ports
Port congestion is creating major challenges at origin, transshipment, and destination ports. Ships often arriving unscheduled is causing berthing conflicts and longer waiting times. Severe congestion has forced some carriers to skip ports like Singapore, leading to delays and congestion at downstream ports. Congestion has also extended to key Chinese ports, with Ningbo and Shanghai experiencing the longest delays. Equipment availability is becoming increasingly challenging with shortages prevalent in Bangladesh, China, Taiwan, India, Cambodia, and Thailand.
West Mediterranean terminals are also overwhelmed by increased shipments from Asia. Additionally, further industrial action at major European ports is worsening the situation, significantly affecting container handling and rail transport.
Extreme Weather Adding to Delays
Since the beginning of this week, South Africa, currently in the height of winter, has been hit by gale-force winds accompanied by torrential rain. A CMA CGM ship lost 44 containers overboard in the extreme weather off the Cape of Good Hope. Fortunately, PFE’s customers’ shipments have not been affected. The severe weather is expected to persist into next week, exacerbating delays further.
Future Outlook
Unfortunately, we anticipate that supply chain disruptions will endure throughout the peak season period and up until China’s Golden Week at the beginning of October. We are monitoring the situation continually and looking for solutions to minimise disruptions and will continue to provide regular updates to keep you informed.
If you have any questions or concerns regarding your shipment, please contact our Customer Service Team at 01376 533039.
