The disruption to sea freight services persists, with rough seas off the Cape of Good Hope exacerbating already significant supply chain delays.
The impact of conflict in the Red Sea region continues to cause market disruption. Capacity on the seas is being soaked up by the longer routes around Africa. Many ports in Asia and increasingly in Europe are grappling with congestion due to increased volumes and slow returns of empty equipment to origin ports. Additionally, rough seas off the Cape of Good Hope over the past few weeks have further exacerbated delays.
Space Challenges
The extended route around the Cape is consuming capacity due to longer voyage distances and transit times. The current available capacity is insufficient to compensate for these longer routes, as all vessels in the market are deployed. This pressure for space, coupled with continued heightened demand, has driven rates to highs not seen since the pandemic.
Demand Remains High
With less than three months until China’s Golden Week holiday on 1 October, when factories shut for seven days, the rush to get goods to the UK is intensifying due to extended voyage times on many shipping routes. Retailers, aware of the current market challenges, are eager to avoid stock shortages during the Christmas season. Consequently, demand remains strong and continues to outstrip supply.
Increasing Pressure at EU Ports
Port congestion is causing significant challenges at origin, transshipment, and destination ports in Asia and Europe. Increased shipping traffic is forcing ships to wait offshore for several days before securing a berth. Unscheduled ship arrivals are creating berthing conflicts and longer waiting times. Severe congestion has led some carriers to skip ports like Singapore, where wait times can reach up to 13 days, causing further delays and congestion at downstream ports. Key Chinese ports, such as Ningbo and Shanghai, are also experiencing prolonged delays. Equipment availability is becoming increasingly challenging, with shortages prevalent in Bangladesh, China, Taiwan, India, Cambodia, and Thailand.
EU ports are facing significant congestion due to increased shipments from Asia. Recent industrial actions at major European ports are intensifying the situation, severely impacting container handling and rail transport. If current negotiations between unions and ports fail, there is potential for further strikes in the coming weeks, which could worsen conditions.
Outlook
We are experiencing significant disruption to vessel schedules and longer transit times. Unfortunately, we anticipate that supply chain disruptions will endure throughout July and August and up to Golden Week. 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.
