As the industry reeled from the impacts of the COVID-19 pandemic, the surging demand for international shipping and international relocations has served to drive up costs as supply chains struggled to meet demand.
Contrary to industry predictions the demand has remained at an unprecedented high throughout 2020 and 2021.
The high demand meant that the price of already limited space on sea and ocean faring vessels has remained high as a side effect further exacerbated many of the secondary challenges the shipping industry continues to face.
With ongoing pressure on the existing infrastructure directly impacting the international shipping schedules across the world as shortages in hauliers, storage and equipment availability, and port operations capacity continues to keep the demand and pricing for these services high.
Now that we have outlined the general challenges facing international shipping, we will aim to equip you with knowledge by outlining how secondary issues affect the current shipping environment and international moves.
The first element of international container move is the road haul. A Heavy Goods Vehicle (HGV) is required to transport your cargo from the destination port to your residence or desired delivery location. Recent market data indicates that the UK alone estimates a shortage of around 80,000 truck drivers. With figures nearing a shortage estimate of 400,000 drivers for the entire continent of Europe. These challenges directly impact a shipping line’s ability to haul cargo to it’s final destination.
The second element being the port. In particular ports where containers are loaded onto vessels. In previous years ports often had excess capacity, allowing customers to store goods while the goods awaited the assigned vessel. The flexibility that this used to afford to shipping lines is absent from today's market, as ports remain filled to capacity, and long term container storage remains an impossibility.
Asian transhipment ports are similarly affected. Traditionally these ports would serve to unload containers from one, and load it to other vessels. With these ports reaching capacity, the number of containers that can be moved through the port remains limited. In certain cases ports have outright suspended reception of new cargo on certain transit lanes as they work to alleviate the congestion, often with little to no notice.
With that said, congestion affecting ports worldwide has impacted all aspects of the move chain. Shipping lines struggle to operate, with attempts to mitigate the demand and congestion the industry has become subject to last minute price increases, schedule changes or the omission of certain ports.
The last issue of note is the container availability. Following the worldwide shutdowns during the COVID-19 pandemic, great numbers of containers remained in, essentially locations that did not require them. Normally the containers would simply be transported to areas with high demand using the surplus of available shipping vessels. However with the shortages outlined in the previous paragraphs there are simply no shipping vessels capable of transporting the empty containers.
We have now broadly outlined how the shipping industry as a whole is affected by the slow recovery from the pandemic.
Here at Shyft we believe that by educating and informing our clients, we are able to provide not only top notch service, but minimize the stress and difficulty of an already taxing process.
We offer further clarification on how these issues impact the customers and international shipping companies below.
Price volatility remains a major factor in the international shipping industry. Shipping lines can, and often will increase freight rates, apply congestion fees, or service surcharges with little notice. These increases remain almost non-negotiable, leaving companies with little choice but to pay these increases if they wish to continue shipping. Unfortunately these charges are out of the moving companies hands, and are as a result passed on to the moving consumers.
Availability remains a persistent problem in the current market. With dramatic increases in the time it takes to secure a slot on a vessel, wait times between 6 to 8 weeks have become common. Taking into consideration the haulage shortage, the shipping difficulties and the scheduling challenges, the flexibility that was once afforded to moving schedules has been greatly reduced, as the client, port and mover schedules need to be aligned.
The prevalence of these issues has increased the number of service failures. It is not uncommon for haulers to have no availability to deliver on the agreed upon date. Vessels are often delayed, while reductions in container availability further complicates loading windows at port.
Once the shipping line becomes unable to provide haulage or a container, they will often either cancel the booking, meaning the customer would need to rebook the container, waiting another 6 to 8 weeks. Or offer clients alternative move dates, leading to further scheduling issues, in turn causing the shipment to miss it’s scheduled vessel, be put on a schedule outside of an acceptable load window, or a vessel not scheduled for the desired port of call.
Scheduling challenges continue to remain a major contributing factor to the volatility of prices and availability. To mitigate these issues ports are by and large only allowing moving companies to drop containers off 7 days prior to the vessel's sailing date. With pickup dates at the clients residences and vessel sailing dates being so close together, it essentially means that if there is a vessel delay, ports will not allow moving companies to load on the original date, and a date within a new 7 day window would need to be assigned. Leading to frequent storage and subsequent handling charges.
If the vessel omits a port the shipment will often be loaded on to a new vessel. Charges are likely to follow as the container waits for a new 7 day window. In the case that the container has been loaded, the shipping line will often absorb the port storage costs, but in turn cause significant delays.
Shipping lines and moving companies are both affected by the staffing requirements. Since the pandemic occurred, the COVID-19 infections, self isolation and quarantines have significantly reduced operational capabilities. When instances of an infection are recorded on a ship, the vessel can not sail into port for 14 days, causing further delays.
If the loading crew itself is compromised, self isolation on a very short notice is often required. Leading to unavoidable and unfortunate delays or even cancellations.
Shyft believes in arming our clients with knowledge , and hope that the information outlined in this document helps you better understand the challenges and possible complications of international shipping.
As always, the team at Shyft remains dedicated to quality, customer satisfaction and the best possible experience in the tumultuous market. By equipping you with knowledge we are certain that together we are able to weather the difficult conditions of the market.