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Global Shipping Update

Please find our latest global industry update below:

USA

The US trucking industry has been extremely stretched due the impact of COVID-19 on manpower and lack of equipment. The situation has become increasingly more challenging and truck deliveries are becoming problematic in a number of reception areas in North America. 

It is currently estimated that the USA is around 60,000 drivers short of meeting demand. If nothing changes, this shortage could grow to 150,000 by 2028.

In order to actively combat the predicted future driver shortage, the below is being invested into across the USA:         

  • Training and simulators in colleges
  • Reduction of minimum age
  • Pay increases
  • Improved technology

For now, the driver and equipment shortage across North America has become very difficult, and is compounded by COVID-19, severe weather conditions, port closures and unprecedented import volumes. 

With volumes expected to spike again as is the trend for around Chinese New Year, we expect the demand on the trucking market to increase even further.

This will increase time taken to source available chassis and trucks to arrange collections and deliveries (particularly for container trucking/drayage) and may incur additional costs which will be communicated as soon as possible.

We are seeing carriers and truckers suspend services and decline new business until further notice. This is a nationwide issue with most severe impact being seen around the main terminals – New York, Los Angeles and Chicago. Woodland have an extensive network of truckers and will utilise this as best we can to minimise the impact as much as possible.

In addition to the aforementioned driver and equipment shortages, a huge growth in volumes globally as well as terminal congestion at ports are impacting carrier haulage operations and timely deliveries. US ports have struggled with the huge increase in volumes, as have ports across the globe, with the US west coast ports reporting a 20% surge in imports with containers causing significant congestion at ports resulting in truck turn times taking between 15-20% longer on average.

The Port of Long Beach, Los Angeles, New York and New Jersey are now experiencing ‘extreme conditions’ (according to the US Federal Maritime Commission (FMC)), with impact felt across the USA, and haulage issues peaking in New York, LA, as well as Atlanta and Chicago.

Additional delays and an increase in cost are to be expected.

We will continue to do all we can to mitigate the charges and find time- and cost-effective solutions for you.

Ocean freight volume is back to pre-COVID 19 levels, if not slightly higher, and capacity very tight, especially for Asia - US freight. As a result, rates are expected to increase further with cargo rolls and tight chassis supply expected to persist through the fourth quarter.

US exports to Australia are still experiencing disruption due to the recent strikes at Patrick Ports, with some carriers not taking any new sea freight bookings to Australia at all until things settle down. Australia’s backlog is being cleared, but we have several containers stuck in Asian transhipment ports constantly being rolled from vessel to vessel while carriers struggle to fit more freight on overfilled feeder vessels. We are doing our best to manage expectations with clients who have freight in these containers and to adapt to twice-daily carrier updates and changes appropriately.

Delays are continuing at terminals in the US, particularly Long Beach / Los Angeles and New York City. The time containers spend within the port complex has increased to the highest level in 18 months. Inefficiencies at the terminals remain as a result of Covid-19 operational policy changes. For the first time in seventeen years, ships are being held in drift zones outside the anchorage in San Pedro Bay. The wait for queued ships ranges from several days to nearly two weeks according to the Marine Exchange of Southern California’s records.
Although major container ports around the U.S. are reporting some level of congestion, the ports of Southern California are experiencing the worst congestions due to high inbound volumes, vessel delays and surging COVID cases among dockworkers. Container lines have also deployed larger cargo ships on the Trans-Pacific route to meet demand. These bigger vessels require more time to unload, adding to the existing backlog.

As a result of these congestion issues, 
carriers have announced emergency surchargesThese vary depending on the shipping line/co-loader.

It is predicted that the congestion will continue at these levels until mid-February. Relief might come with a seasonal lull in shipments from Asia that typically follows the Chinese New Year holiday.

UK

As per previous advisories and the widely communicated issues at the port of Felixstowe with vessels taking much longer than usual to discharge/load, delays at both Felixstowe & Southampton ports are still ongoing due to congestion, which continues to cause vessels berthing issues and container restitution.

Brexit has had a significant impact on the market as many companies ‘stock piled’ goods in the UK in preparation for delays at the border from early January 2021. As companies across the globe navigate the new regulations and documentation, Woodland recommend you check carefully as to your responsibilities with customs under the Incoterms you use with your sale and/or purchase of goods to/from the EU from January.

Woodland can act as your customs intermediary should you require one and has seen hundreds of companies safely through new Brexit regulations since January 2021.

Find all Brexit-related information here.

The grounding of the vessel EVER GIVEN in Egypt's Suez Canal has impacted vessels unable to pass on what is one of the world's busiest trade routes. As a result, shippers may switch to using air freight, resulting in reduced capacity and an expected increase in air rates.

Air freight capacity from the UK to the USA is becoming tighter, especially to Chicago and Atlanta, which can result in higher pricing - please book as far in advance as possible.

Freighter aircraft are expected to be in short supply for the next three years putting a further strain on International airfreight capacity and rates. Boeing estimates it will take three years for travel to return to 2019 levels, with the International long-haul market being the last to return to strength.
Since the beginning of the pandemic, more than 30 carriers have failed or entered bankruptcy restructuring.

EUROPE
With January 2021 fast approaching, we have seen severe increases on inbound trade volumes from the EU to the UK with companies bringing in goods in preparation for the New Year and potential delays at the borders. This is creating an early ‘peak season’ forcing up trailer prices in the market due to the imbalance of trade.
 
As a result, equipment is currently in short supply due to the high demand and notice periods on bookings with carriers are extending out to near a week in some markets. Please make sure you book early for any requirements you have to avoid delays.
Many of the large European groupage network operators have had to suspend bookings and certain lanes due to the fact that their network depots have become overrun with freight stuck due to either incorrect paperwork to customs clear or clearance agents not clearing goods quick enough.
Through January 2021 there was a reduced volume of trade from the EU to the UK,  a lot being attributed to UK businesses having stock piled pre-Brexit in anticipation of the bottlenecks due to changing regulations.
The Road Haulage Association reported that around 65% of export trailers leaving the UK for the EU are running empty due to delays in the UK and British businesses not exporting enough. Trailer operators reduced equipment levels with the UK over January to compensate for these reductions in import/export volumes and potential border delays with customs, and prices increased as a result.
ASIA

Hundreds of containers bound for Rotterdam from China are delayed and vessels in transit impacted by the EVER GIVEN having become wedged across Egypt's Suez Canal, one of the world's busiest trade routes. 

 

While the grounded vessel has been refloated, the impact on the industry will be significant. 

For a full overview of all vessels affected, please click here. 

We’re in contact with carriers regarding possible diversion of cargo vessels in transit and will update all affected clients as soon as we can.

Equipment shortages are now dire particularly for 40GP and 40HQ. Some carriers have stopped accepting bookings due to not being able to provide the equipment altogether. The ongoing shortage of equipment is expected to last for many weeks to come.
A shortage of containers rather than space on box ships is the main driver of the unrelenting spike in freight rates on headhaul routes.The focus by carriers to reposition their empty equipment as quickly as possible back to Asia, to take advantage of skyrocketing spot rates, has left exporters around the world scrambling for containers. (Source: Loadstar)

We have been notified of considerable increases by way of GRI’s and other related surcharges which have driven rates to new heights. The UK is particularly affected, which is mainly due to serious port congestion at the Port of Felixstowe with impact felt across all other UK ports.

Carriers have publicised that they are currently reluctant to take on UK-bound cargo as it is causing them increasing operational difficulties. This, in combination with a further wave of blank sailings being introduced and a growing lack of equipment in China and SE Asia, is impacting rates. These industry-wide challenges are set to beyond the Chinese New Year.

The above-mentioned challenges are impacting both air and rail solutions, resulting in an increase in rates due to lack of capacity and congestion. 

Chinese New Year
In celebration of CNY (12-16th February), offices will close across China and Hong Kong, and the movement of freight is expected to slow as a result. Beijing has announced that travellers must quarantine for 14 days when they reach home and a further 14 days upon return to their work place. With a 7 day Lunar New Year holiday, and a lot of truckers having opted to go back home for Chinese New Year, the total period of absence could be up to 35 days.
Rail Services from China
A lack of equipment is resulting in space issues. In addition, serious congestion is being reported at Chinese and European border crossings.

In light of the above, rail services are being restructured with reduced services being operated from various China rail lines and some services currently not running at all.

Our teams are working hard to find alternatives and to assist with moving your supply chain - the capacity shortage is significant and it is important to try and secure bookings wherever possible.

Please be reminded of the importance of booking well in advance and, where possible, please be open to considering alternative sailings to what you originally may have planned to secure space.

Rest Of the World

The Maritime Union of Australia (MUA) has provided further notice for the Protected Industrial Action covering a work ban and stoppage at Victorian International Container Terminal (VICT):

  • Tuesday 16th Feb, Four-hour stoppage from 16:00 to 20:00. During this period the entire terminal will stop operations.
  • Friday 19th Feb, 18:00 to Saturday 20th Feb 06:00. All landside and quayside operations will stop at this time.
  • Work ban by employees using personal mobile phones for work related matters for 48 hours, starting from Friday 19th Feb 06:00 to Sunday 21st Feb 06:00.
Equipment shortages continue causing problems globally, impacting Australian supply chains also. The integrity of shipping line scheduling remains poor with delays as a result.
Australia is facing severe empty container congestion issues. According to local reports, there are more than 75,000 empty boxes crowding landside facilities in Sydney. 20’ GP equipment is extremely tight ex all ports in Australia.
The Coastal Trade is facing significant issues, causing significant disruption across the network and severely reducing access to space and equipment. Due to heavy congestion in SE Asian ports en route to Australia (Singapore, Port Kelang, Tanjung Pelepas), vessels are arriving in Brisbane (first AU port) delayed. The average delay is currently ~ 7 days upon arrival into Brisbane. The delays worsen as the vessel transits the coast due to congestion in Sydney, Melbourne and Fremantle.

India’s container shortage could last another three months, as congestion hits Colombo and shippers call for tighter regulation of freight rates.

The acute space problem over the past few weeks was the result of increased demand, reduced imports and port rotation issues.

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