Supply chains continue to be challenged by the impacts of the COVID pandemic, which is why we have continued to focus on the provision of air, sea/air and sea freight services from Asia and the US for your time-sensitive and urgent shipments.
As we move into the 2nd quarter of 2021, we are all hopeful that the vaccination roll-out will lead to a return to some sort normality, but until then, it looks like last years’ challenges will remain with us and intense competition for scarce vessel space and equipment, means that prices are likely to stay strong, even if demand subsides slightly.
With scarce space on all the major trade routes, relying on the spot market is financially and operationally risky, with multiple surcharges and no certainty that your cargo will even be loaded, which is why accessing the contracts we have negotiated with the lines and alliances is the most effective way to minimise risk in your supply chain.
Even with carrier on-time performance globally at its lowest recorded levels, container volumes grew last month 3.5% year-on-year, but growth and volume distribution is uneven across regions and trades, which is why we continue to see congestion and the re-allocation of capacity, which contributes to tight supply/demand in trades which are not seeing demand grow.
The container shipping lines have not seen the usual slowdown in demand from Asia after the Chinese new year and, aided by the announced blank sailings, their pipeline of cargo and short-term volume projections remain very strong, which leaves pricing power very much with the carriers.
Consecutive blanked sailings by the Ocean Alliance are putting upward pressure on rates from the UK and Europe to the US, which have largely not been subjected to the massive increases impacting other routes. The level of announced blank sailings for March and April are at the consistently elevated levels, we have seen since last year, which leads us to wonder if the lines are trying to avoid the chronic port congestion on the US west coast, rather than an attempt to drive up rates.
The lines have worked to ensure that every available container is being utilised, even those that needed repairs, in order to increase equipment inventory, but increasing inventory will have little impact while global supply chain performance is so diminished, in so many areas, in so many critical regions.
The lack of usable empty containers will not be resolved while laden export containers are sat at operationally ineffective terminals and the shipping lines’ all-time-low schedule reliability, adds further to the delays at ports across the globe.
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In 2020 Felixstowe took 46% longer than the average port to move a container, with vessels typically spending more than 32 hours in port, compared to 18.5 hours for the quickest port.
Though not as bad, congestion continues at many UK ports, contributing to a “critical build-up” of empty equipment at Southampton and Felixstowe, while Liverpool is experiencing severe landside delays and long turnaround times for vehicles, with the problem appearing to be a lack of straddle carriers to serve the landside operation.
The port’s operational issues has contributed to the 2M alliance announcement that it will temporarily suspend the Liverpool and New York calls of its TA2/NEUATL2 transatlantic loop for six and nine weeks, respectively.
Our haulier partners at the port have reported that extended wait times last week – queuing for hours, to pick up or drop off boxes – were the result of peak vessel demand and a suspension of operations at Terminal 1 due to congestion.
Complaints from hauliers have reduced delays, but we are aware that some issues remain and are monitoring the situation closely to ensure our shippers are not affected.
Major delays have hit the port of Singapore, with congestion causing vessel turnaround times to more than double and week-long cargo rollovers, at this major transhipment hub.
US terminal operators expect near-record container volumes to continue into the spring and the backlogs of vessels and laden inbound containers show little sign of dissipating.
Container ships are waiting at anchor for a berth in Los Angeles now almost eight days and when they do finally get a berth, the vessel working is hit by congestion on the terminals, with some spending almost a fortnight alongside. There is an average of 30 ships a day, waiting at anchor for a berth on the US west coast.
Air cargo capacity from major sourcing regions is expected to remain constrained for some time, resulting in the biggest volume shippers increasingly relying on charter operations.
We work with a global network of global carriers and freight operators, which means that Norman Global Logistics continue to offer freighter (and ‘preighter’) space across China, Hong Kong, India, North America and continental Europe for your time-sensitive consignments.
“Dedicated preighters and freighters, for the fastest transit of time-sensitive shipments from Asia and the US”
Global vaccination programmes are likely to lead to a pick-up in passenger travel in the second half of the year, but this capacity will mainly be short-haul and domestic flights, which won’t add any capacity for long-haul cargo operations.
Long-haul travel, which is a much bigger part of global air cargo capacity, has been grounded since the first quarter of 2020 and will be slower to resume, with the market unlikely to be back to normal until 2023.
Where limited air capacity is available, spot rates are moving in one direction, with Shanghai to North Europe up 98% year over year.
Air cargo demand is now nearly at par with pre-COVID volumes, despite much less capacity in the market, with global air cargo tonnage just 1% behind 2019 and IATA data showing global demand was up 1.1% compared with the same month in 2019.
Throughout the pandemic, air freight costs have risen massively, due to the sustained high demand and limited capacity and demand remains high, driven by huge increases in e-commerce and continuing demand for medical supplies.
Our offices and network extends across Asia and the United States, with our customers continuing to source from and expand their export markets in both regions, throughout these challenging times.
Norman Global Logistics negotiate rates and volume agreements with a broad portfolio of airlines, freighter operators and shipping lines, across the three alliances, to offer our shippers the widest range of service offerings, routes and rates.