Capacity challenges on Asia-Europe sea freight services are intensifying as carriers continue to squeeze space. At the same time, uncertainty in the Middle East continues to affect fuel costs and wider global supply chain conditions.
Sea Freight Space Becomes Increasingly Challenging
The challenge around available space has intensified further this week. Carriers are continuing to manage capacity through blank sailings and, in some cases, smaller vessels are also being used as part of wider network adjustments. This is affecting where and how much capacity is available, making it increasingly difficult to secure cargo on planned sailings. Demand from Asia is also continuing to rise, further squeezing already limited capacity and pushing spot rates to exceptionally high levels. With more blank sailings likely to be announced, restricted capacity conditions look set to continue in the weeks ahead.
Uncertainty around the conflict in the Middle East remains, and further exchanges between the US and Iran this week mean there has still been no progress towards reopening the Strait of Hormuz. Oil prices therefore remain elevated, meaning fuel surcharges continue to apply and remain under review. Wider fuel-related costs across shipping operations and inland services are also staying high.
For now, services are continuing to move relatively well, and UK arrivals are holding up without any significant congestion issues. However, delays in Rotterdam are still affecting parts of Europe and, while there is no direct impact on UK arrivals at this stage, we expect some knock-on effect to begin coming through over the next few weeks as more heavily laden vessels arrive into European ports. This is likely to worsen congestion in Europe and may also create equipment shortages at origin as cargo is held up. That risk is one we have seen before, although at this stage we do not expect conditions to deteriorate to the levels seen two years ago.
Air Freight Delays Increase Again
Air freight services have come under renewed pressure this week, with more flight delays being seen as carriers respond cautiously to the continued uncertainty in the Middle East. Some major carriers have experienced delays in transit, and a number of freighter services have also been cancelled.
Air freight rates remain high, and fuel surcharge levels continue to keep overall costs elevated. Customers should also note that the fuel surcharge affecting UK trucking and delivery services remains in place, adding further cost pressure once shipments arrive into the UK.
If you have any questions or concerns regarding your shipment, please don’t hesitate to contact our Customer Service Team on 01376 533039 or email [email protected]. For Air Freight queries contact 01753 278020.
