Welcome to our May 2021 Newsletter
We do feel and share your pain and understand your frustrations and we’re here trying to do everything we can to minimise the effects of the below mentioned issues by striving to maintain our high standard of support and service to our customers.
Global Shipping Update
Shipping from Europe and UK:
The situation in Europe is still not good with many countries continuing to be in various stages of lockdowns. There are still long delays with shipping and severe shortages of equipment in most countries in Europe and the UK. Bookings for cargo on any of the direct services can take several weeks waiting for space to be available. Transhipment services are not much better, but these services can then be delayed for weeks in the various transhipment ports. Vessels are still being delayed due to port congestion issues all around the world and sailing schedules are constantly being changed with vessels skipping ports or changing port rotations to try and make up lost time. All these issues along with the various COVID restrictions in place are continuing to cause severe backlogs of containers waiting to be shipped and unfortunately the carriers just can’t keep up with the demand. At this stage not much has changed from last year and shipping is continuing to be extremely difficult and very expensive with rates on the rise again. Below are some links to some recent notices we’ve received.
Shipping from the USA:
Shipments from the USA are also still experiencing long delays due to container and chassis shortages, port congestion issues, rail delays, late vessels and road delivery delays. Many of these issues are being caused by the high volume of import cargo being shipped. Imports into the USA have increased dramatically during COVID as US consumers continued to spend online while in lockdown, as is the case in most countries. As a result of this surge in import cargo, the terminals, trucking companies, railway providers and logistics companies just can’t keep up with the demand, which is resulting in long delays and increased rates. Shipping lines are also continuing to cancel bookings at the last minute or roll containers to the next sailing due to their vessels omitting a congested port altogether. Schedules and voyages are constantly being changed as the carriers try to play catch up and make up time at the next port.
Shipping from India:
India has been severely affected with further COVID outbreaks and several parts of the country are now in lockdown with many businesses and services shutdown. This is causing huge issues with the movement of cargo in India as well as shipping, as there are various restrictions in place on workers as well as on the transport and movement of goods and people. A lot of factories and businesses have been completely shutdown while others have had their staff levels reduced dramatically and there are also issues with workers not being available due to the impact of COVID-19 and the associated quarantine requirements. All these factors are severely affecting the shipping of goods from India along with the handling and movement of cargo, as the ports, customs offices, trucking services and freight companies are all heavily impacted at this time.
Shipping from South East Asia
As with most other countries, space and equipment is difficult to obtain and with most services from South East Asia being continually overbooked. Although some countries like Vietnam, Korea and Thailand are a little better than some when trying to get bookings, whereas in other countries like Indonesia and Taiwan it can be very difficult to get a booking on a vessel. Many of the main ports in South East Asia are also impacted with transhipment containers and this just further adds to the overall congestion at these ports and causes more unwanted delays with the movement of cargo. Rates from several of these countries are also set to increase again from the 1st June and we expect that rates will stay high while this situation with shipping continues.
Shipping from China
Space and equipment is still a huge issue from China, with many carriers unable to supply empty containers needed for shipping, as well as most vessels being overbooked causing shipments to be rolled and bookings cancelled. One of the main reasons for this situation is that the trade lanes from China to the USA and China to Europe are currently booming with freight rates to these areas more than double and in some cases triple the rates to Australia. Therefore, the carriers in China are diverting any available equipment to these routes instead of Australia. We’ve even been advised that one carrier is removing one of their larger vessels from their Australian service and adding this to their USA route, which will further reduce the space available on our route. But we are still managing to get shipments moving from China as best we can under these current circumstances with our agent’s assistance, as they do have some strong relationships with several carriers that can supply us with space and equipment. But this is getting more and more difficult each week and looks like it may only get worse as less space and equipment will be available to Australia. Then, on top of all this is the fact that rates will continue to rise, as the shipping lines keep adding surcharges and rate adjustments as per some more recent notices we’ve received as follows:
Shipping to and from New Zealand:
New Zealand seems to be one of the worst affected countries when it comes to shipping, as there are huge delays trying to get any space or equipment both to and from New Zealand. All ports in NZ are heavily congested, but the worst affected ports seem to be Auckland and Tauranga with some carriers having stopped calling Auckland altogether. This action has caused several flow on effects to the movement of cargo on the North Island, as more cargo is now being trucked from Auckland to Tauranga. The rail service from Auckland to Tauranga is backlogged and overbooked with 6 to 8 week delays being incurred with trucking being the only safe option to meet vessel cut off times, but is a lot more expensive than rail. Also, due to the long delays being incurred in most NZ ports, the carriers have reduced their services and changed their routes to try and minimise these delays and this is affecting all vessels to and from New Zealand. At the same time the carriers are also implementing various rate restorations and port congestion surcharges on this route, which again is extremely frustrating considering how bad and unreliable the current services are. Another major issue in New Zealand is the situation with empty containers, as most empty depots are over capacity and are not taking any more containers, so the trucking companies are having to leave these at the clients premises or hold them in their yards to incur further costs.
All transhipments ports in Asia are still heavily congested with many containers being delayed for several weeks waiting for a connecting vessel and at the moment, there are no signs that this situation will be improving any time soon. Therefore, it’s highly recommended that shipments be moved on direct services wherever possible, so as to avoid these long transhipment delays, but with the way shipping is at the moment, this isn’t always possible.
Shipping Line Container Detention free times
The majority of shipping lines & origin ports are refusing booking requests for extensions of detention free time at destination. Sighting equipment shortages & demand, as reasons to return empties asap. No doubt shipping line revenue from detention is skyrocketing.
Shipping Rate increases:
As mentioned in several of the above updates, freight costs are continuing to increase as vessels remain full and as space and equipment continue to be in short supply. We’re not even in our peak season as yet, so no one really knows where freight costs will end up this year, but it’s expected that unfortunately they will be considerably higher than in previous years and we’ll continue to keep you updated on this front.
The situation with airfreight to Australia is still the same with little or no change to the amount of available services to move goods by air. There are still very few passenger flights and only limited cargo services operating to Australia, so space and bookings can be quite difficult to get. Airfreight rates are also still very high and it’s expected that they will remain this way until air travel eventually returns to some sort of normal service, which still appears to be a fair way off at the moment.
CFL are now seeing FCL export bookings from AU fully booked from 6 weeks to 3 months ahead depending on the final destination. This is a situation we have not seen in decades and the days of making an FCL booking and having an expectation of it sailing within 14 days is currently no longer obtainable for our valued customers. For those that we do secure space for, please note CFL continue to see these vessels delayed, experience last minute schedule changes or port omissions with little or no notice impacting your export planning.
We do suggest exporters always relay this information on to your overseas customer’s to be aware of these delays to ensure transparency. It’s a very fluid situation which is changing day by day and expectations that we would see things back to normal at the end of Quarter 2 (next month) are not realistic at this time.
LCL bookings continue to remain steady and space is available for general cargo, however you may see transit times swell as shipping lines are re-routing their vessels via other ports on top of main global ports remaining congested further impacting transit times of your goods.
Air freight exports have improved in relation to transit times and available space from that we have seen earlier in the year. Albeit the transit times are better and the rates no longer continue to sky rocket as they were during COVID for the time being.
MUA Action at Patricks:
We have received several notices recently advising of new MUA Industrial Action being taken at several Patrick Terminals around the country with overtime and shift extensions being banned. Hopefully these actions won’t cause too many disruptions to Patrick’s day to day operations and we’ll just have to wait and see how this all pans out in the near future. Patricks have informed us that they are proactively working hard towards a solution with the MUA, so that a fair and reasonable outcome is achieved for all parties.
Shipping in the Media Spotlight
Our industry body Freight & Trade Alliance have been active in the media recently, below are some links to recent articles that might be of interest to you
Please contact your usual CFL contact if you have any questions or if you need to discuss any of these matters, as we’re here to help you through these difficult times.