Global shipping crisis creating a challenge for host of industries worldwide
A wide range of industries within the UK and across the world are feeling the crippling effects of a global shipping crisis, created by a ‘perfect storm’ of contributing factors.
Covid-19 initially caused a significant drop in international trade, prompting shipping lines to reduce their capacity dramatically. This issue has eased gradually over the past 15 months, with container space slowly returning to pre-pandemic levels. However, the struggles for many businesses are likely to continue for some time.
David Ozard, General Manager of international removal specialist John Mason International, says the resulting impact on both trade and companies moving goods abroad is disturbing:
“We are faced with a massive challenge because the system for moving items overseas is currently broken. For us the situation is a concern because, like everyone else, we are very much at the mercy of international shipping lines – who are increasing open market rates, and creating havoc with bookings.
“Some of the issues surrounding these changes are understandable. We know that the Covid pandemic has had a negative impact on every aspect of life worldwide. And, for us, Brexit prompted a panic here in the UK – with a large number of European drivers leaving the country and returning to the EU. This led to a shortfall of HGV drivers, with a knock-on effect of haulage companies ‘cherry picking’ which trades they service.
“The UK is one of the only locations in Europe where haulage firms actually load containers directly at people’s homes – and it is clear that many dislike doing this. They avoid it whenever possible. This means, on top of everything else, we face a shortage of companies to choose from. They, in turn, can dictate to shipping lines, and can pick and choose the work they do.”
Customers of John Mason International are benefiting from the removal specialist’s enviable position as one of the largest members of the Movers Trading Club (MTC) – which provides favourable shipping rates, and some stability. However, there is much to do before a return to ‘business as usual’.
“Even now, there has been a recent outbreak of Covid in Guangdong province in southern China, sparking sudden congestion and delays at ports there,” adds David. “And the recent Suez Canal incident caused delays across the world. By it’s very nature, international shipping is global – so containers and ships who are caught in a bottle neck in one country, are out of position and this will have a huge knock-on effect elsewhere.
“Cargo ships are queueing at ports, and we are being told of delays with, sometimes, just 24 hours notice.
‘These issues will take many weeks to resolve. In the meantime, shipping lines appear to be making the most of the crisis. They are charging vastly inflated rates. One recent report suggests that a company normally paying around $2500 for a 40 foot container from China, has been charged in excess of $16,000 for the same amount of space.
“We have also been warned that it can take up to eight weeks to gain access to a container. Some shipping lines are suspending routes. For example, ONE line has stopped all sailings to Australia and New Zealand – in a bid to correct the imbalance of containers being stranded in these countries.
“And now, both ONE and Hapag-Lloyd have told us we must provide 45 days’ to eight weeks’ notice to book containers for North America (USA & Canada). Fortunately, some lines are allowing short notice bookings – but they are doubling their rates as an absolute minimum.
“All this, sadly, means delays for us and our customers, regardless of whether they are in need of a whole container or are sharing with others (groupage).
“It also means increased costs. At John Mason International we are certainly not profiting from these rises, and we are doing our best to minimise any disruption for our clients.
‘Our team is working tirelessly to secure the very best shipping rates and timely container bookings. We do see light at the end of the tunnel but, for now, we ask our customers to bear with us as we try to overcome one of the biggest challenges ever faced by those who are in the business of moving goods overseas.”