Ocean Freight Chaos

Expect supply chain disruptions even though you are paying escalated freight rates.

In a shipping mode that was traditionally reliable and economical, the recent chaos in ocean freight has created significant challenges that are severely impacting service delivery globally.

While ocean demand continues to exceed capacity, we have limited options available to secure space.  Currently, there are 9 global carriers, in comparison to 17 in 2015 and of the 9, three alliances control over 80% of the global containerised market.  In addition, schedule reliability is at a record low, ranging between 35% – 40% for most of 2021.

Shipping Lines desperately try to maintain vessel schedules through port omissions, blank sailings, sudden routing changes, or additional port calls. However, this has a negative impact on customers trying to move cargo from high-volume areas.

Middle East services remain highly congested, with limited shipping lines being able to release bookings from this region – especially to South African ports.  There is a shortage of 40′ units and special equipment like reefer containers.  It is reported that even bookings made on “premium” rates are being rejected.

Congestion out of the Far East remains unstable, compounded by Typhoon Chanthu, Covid-19 pandemic is driven labour challenges and high export volumes.  The number of container ships waiting for berths off Shanghai and Ningbo ports has surged over recent weeks.

Adding to an already frail trade lane, we have been informed of ‘dual control of energy consumption policy that has been implemented by the Chinese government, whereby factories in China will only be allowed to work between 2-4 days a week.  These measures were introduced to reduce carbon emissions.

This is a huge concern considering the damaging effect this will have on cargo readiness meeting vessel schedules, especially this time of the year that is traditional “peak season”.  We urge you to discuss any production delays that could arise with your suppliers in China to plan lead time accordingly.

On the European routes, we have seen an increase in notifications of vessel changes and/or omissions.  There is a global shortage of qualified truck drivers, and in the UK, our office advises that bookings for truckers are made 2 weeks in advance to ensure collections or deliveries can be met.

The current situation is beyond our control, and it is difficult to predict when it will ease up as ports, terminals and transport networks remain under strain.  Kindly consider adding 2-4 weeks to your supply chain to cater for unforeseen delays.

We are working closely with our offices, network agents and carriers to manage these challenges as best possible.