Spread the news - UK perspective - April 2023
by Santa Fe Relocation UK
Since our previous update, ocean-freight rate levels have dropped considerably on the majority of export trades from the UK when compared with recent unprecedented high-rate levels. This is due mainly to reduced global demand for shipping space currently experienced by the shipping lines, caused by a combination of inflation, high interest rates and impact of the Ukraine war.
However, whilst reduced freight-rates certainly help to bring down the overall cost of an international sea-freight move, welcomed by customers and movers alike, the many shipping-line operational and service issues associated with the worldwide shipping market since the Pandemic have not gone away. The good news is, we can report current shipping-line acceptance of container bookings on most outbound trades from the UK is steady, with vessel capacity and scheduled sailings available on average subject to two-weeks’ notice.
We are however, concerned to report that shipping-lines are already applying operational measures to adjust for these reduced freight rates. These measures can include cancelling an entire vessel schedule forcing all bookings to a later vessel, cutting out selected destination ports-of-call, ‘slow-steaming’ to reduce vessel fuel consumption, which leads to longer than scheduled voyage times, and last-minute arbitrary and without warning re-booking (of loaded) containers due to lack of capacity, i.e., transferring from placing the loaded container onto the booked vessel, and re-scheduling it for inclusion on the next (later) vessel departure.
These service issues are exacerbated on some trades because of a lack of import shipments arriving at European and UK ports. This imbalance of trade is an additional challenge for the shipping-lines, causing a shortage of empty sea-containers readily available for re-loading and export. In some cases, this will impact a customers preferred moving date.
Ironically, on some trade lanes, freight-rates have fallen so far, that the shipping lines counter-measures are already leading to freight-rate increases. Despite this, Santa Fe UK benefit from negotiated annual freight contracts which smooths the impact and contributes some degree of stability. We predict this uncertainty will gradually settle and stability will begin to return in the coming months. Ultimately, severe service challenges, short-notice changes to container bookings, and variable freight rates, despite downward trends, should be reflected in our inter-continental door-to-door quotation and terms.
Many destination ports around the world are experiencing varying lack of container or ship availability, leading to associated delays.
Eastbound trades from Europe (shipments to Asia, Oceania, India, Middle East). While acceptance of bookings is currently good, these trades are the most likely affected by the aforementioned blank
sailings, and slow steaming. Customers should be aware that sea-container shipments may take longer than expected to arrive through no fault of us.
Westbound trades from Europe (USA, Canada, Caribbean, and Latin America): these routes remain robust, acceptance should be good and ships ‘waiting time’ for unloading at most USA ports has improved. However, high demand for container space is likely to be an issue during the peak season summer months. Destination ports in the Pacific Northwest, such as Seattle, Portland, and Vancouver, are still not being served on a direct ‘all water basis’, with alternative routes via ports on the US East Coast, but expect delays because of intermittent congestion on the US rail networks which carry the containers from East to West Coast.
Southbound trades from Europe (South, East, and West Africa): Where a shipping Line does offer a service on a given route to this area, it is usually quite reliable. However, many hinterland destinations (usually served via main ports with overland on-carriage to inland freight terminals) have been removed from the Shipping Line schedules because of lengthy main port congestion and or poor on-carrying transport infrastructure. This has caused a reduction of the main destination ports of call coverage across much of this region, especially the Indian Ocean Islands.
The shortage of UK HGV drivers continues to be a serious problem across the country, impacting all industries including shipping. High demand combined with short supply is driving up container haulage costs included in our quotation. Shipping Lines who control the container haulage to and from the loading point and the port have recently introduced a Driver Retention Surcharge (DRS) aimed at maintaining their pool of HGV drivers, who would otherwise leave. This driver shortage, despite the DRS is causing some sea-container bookings to be cancelled at short notice. This is a very common operational challenge for Santa Fe and their customers, impossible to predict when booking the container, and frankly, very little that can be done to protect Customers from such inconvenience.
PORT STRIKES Our UK Ports have experienced labour and Border Force strikes over the past 6 months; while no actions are currently scheduled that we are aware of, ongoing negotiation, particularly with UK Border Force workers continues. Customers should be aware of the impact of potential future strike actions which could cause unexpected delays both outbound (export) and inbound (import) shipments, particularly the inbound UK customs clearance time and subsequent container deliveries.
SOURCE: Santa Fe Relocation UK