The year that was 2020 continually through the shipping world into an array of scheduling chaos, delays with global movement.
Below are the three most significant issues currently faced, resulting in extended delays;
• Ongoing industrial action at the ports:
With enterprise bargaining agreements expiring at the commencement of the pandemic across all three Stevedores, the MUA has facilitated protected industrial action, resulting in significant port congestion, vessels omitting ports or rotating ports at late stages and vessels “slow steaming” (increasing sailing days) to avoid the vessel build up occurring. Industrial action has continued in 2021, including more recently at VICT:
As a result, certain timeslots to pick up containers have been eliminated, port staff are unable to proceed with overtime, stevedores working under capacity are not assisting other stevedores in vessel overflow and at times, containers are taking over a week from arrival to offload to enable pick up. This is on top of any port rotation, slow-steam or omission delay. As industrial action continues, the problem of congestion is exasperated, with delays leading to further delays and a lack of clearance of backlogs. Whilst industrial action isn’t occurring overseas, covid cases within various ports such as LA and KL have created similar effects, with shut downs and reduced staffing hours resulting in port congestion delays at those ports..
• Global container shortage:
In addition to the congestion at the ports to unload containers, similar congestion exists at the de-hire yards to receive empty containers. Many empty parks are at full capacity and over 150 redirections are currently in place, resulting in containers being advised to be moved (at times even en route to the original de-hire yard) to different suburbs, all across Melbourne. In one instance, a container was redirected to 5 different parks before being accepted. Zim just last week had a 5-day window, where no yard would accept their empty containers. This has been compounded by increases applied by all of the container yards, with de-hire rates doubling in the last 6 months to hit record highs. With an oversupply of containers at de-hire yards (not returned to Asia), we have also witnessed some shipping lines not having the required number of containers (such as 40HC) to supply to factories for packing and loading onto their vessels, for delivery back to Australia. Vincent Clerc, chief commercial officer for Maersk, the world’s biggest shipping company, said there were “simply not enough empty containers in the world to cope with the current demand”.
• Increased demand for global imports:
As Governments across the globe increased their expenditure, to combat the economic downturn associated with the pandemic, this cashflow boost has seen citizens of western economies significantly increase their purchase of imported consumables. The USA for example has had double digit growth in imports as well as 12-month highs in Feb then again in March 2021; which is unheralded, especially given the ongoing health crisis. Australian import demand has also mirrored similar increases. As consumer demand continues to rise for goods rather than services (lockdowns, lack of travel etc), this puts a strain on the global movement of stock. Shipping lines are in turn struggling to keep up with this demand. The issues with the shipping lines is three-fold. Firstly, the increased demand requires more vessels and more vessels cannot be constructed expediently. Secondly, vessels have been reallocated away from their Asia – Australia routings, to more profitable routings into Europe and the USA. Finally, the lines are omitting vessels, that traditionally carried lower capacities into Australia, to ensure they maintain maximum loads and invariably profitability in their routes.
The net effect of this situation, increases the demand across fewer sailings, which in turn results in both a critical space issue and additional timing delays.
Unfortunately, these delays aren’t simply consigned to sea freight schedules. Air freighted goods are facing equally as challenging an environment as international commercial flights are virtually non-existent (the bulk of freight movements by air, are on commercial airlines), adding strain to the limited bulk freight flights available. An example of this, pre-covid, flights direct to and from the USA, were daily and goods could fly via Delta, American, United, Qantas and Virgin. Currently, there is one daily service only- United- thus reducing the options and speed in which goods can be flown to and from the US. This dilemma is replicated throughout all air routings due to the lack of international flights available to secure space.
What I can assure you, through the gloom, is that Excel Logistics as your global freight partner, continues to work closely with our overseas offices, the shipping lines, the airlines, Australian Quarantine, the ports and any 3rd parties to minimize the ongoing disruption of these delays. As we maintain our own fleet of vehicles across the Eastern Seaboard, as we are IATA approved, allowing us to book directly with every airline, as our international agency partners work with every shipping line, Excel will always offer the fastest service, within those elements of our control, to ensure our customer’s movements are expedited.
Please feel free to contact me at any time to discuss this situation further and make sure your needs are met.