The Impact of Shipping on the Supply Chain
2021 has been a year of frustration for importers of goods dealing with suppliers in Asia and the Far East, Covid-19, Port Congestion at both Origin and Arrival Blocked Waterways, Blank Sailings, Typhoons, recently reported power cuts in China and of course the ever-increasing shipping costs…
Blank Sailings are normally put in place to increase vessel schedule reliability, which is currently reported at an all time low of around 33%, however with the current backlogs this may further aggravate the situation. This will make shipping from Asia much more difficult in Q4, particularly as we see trade increase ahead of Christmas with the demand for container space already at a very high level.
September started to see increases in rates beginning to flatten out, albeit at an extremely high level. This has been very short lived, with current rates already 972% higher than the same month last year, one of the major shipping lines have decided to apply a Peak Season Surcharge of US$2000 per 40’ container on the Asia-North Europe Trade Lane, as reported in Loadstar.
It is widely reported that rates will remain at this level for some time to come with Golden Week (1st-7th October) on the horizon and Chinese New Year (1st February) fast approaching. The likelihood is that it will be well into 2022 before any downturn in the current rates will ripple through to importers, continuing to drive the cost up throughout the entire supply chain.
The driver shortage in the UK has had an impact on not only delivery times of containers but has also seen a price hike of over 25% either caused by demurrage, timed bookings or just a surcharge to get the goods delivered when required. Booking slots for deliveries are now well in advance of three weeks, which has it’s own problems caused by the vessel delays in docking.
In addition to growing demand and lack of availability of containers, airfreight rates are also on the increase as the demand for space becomes a premium, this will again only get worse leading into the Peak Season.
If you would like to discuss the above in more detail or speak to us about anything else, you can contact our friendly Sales Team on:
Call – 01653 617718
Email – sales@just1source.com
