Despite the peak season continuing and the shipping lines on the way to a colossal $11 billion profit for 2020, further price rises and blanked sailings are on the way.
Equipment availability continues to deteriorate from every origin, vessel turn times have deteriorated, ports are congested and empty returns from the UK are being impacted.
Our offices across Asia are working flat out to secure equipment and space to get our containers away, but despite the service challenges, freight rates continue to increase.
It is critical that we communicate candidly, just how challenging the environment is, so that you can make informed decisions
Operational restrictions at UK ports due to Covid-19 continue to impact vessel berthing times and vessels continue to take longer to be offloaded, increasing instances of ‘cut and runs’ (whereby the vessel moves to the next European port in the loop before having offloaded all UK containers in order to maintain schedule integrity).
We have heard that Felixstowe has over 60,000 empty containers around the port and 12,000 containers in the terminal full of PPE.
While carriers need to transfer the remaining containers back to the UK and bear the costs, it extends transit times and the carriers must recover these costs and in other instances the vessel may omit the UK port completely.
THE Alliance has announced plans to blank a quarter of its Asia-North Europe sailings in the first week of December, at the same time that lead member, Hapag-Lloyd, plans to increase rates on the route by 70%.
Rates (all in) from the 15 Nov onwards to the 22nd are set to be about $2000/teu and from the 23rd into the start of December we are expecting to see over $2600/teu. LCL shipments, which would normally be in the $40 per m3 range, will be $90 + per m3.
We would not normally broadcast rates in this manner, but it is critical that we communicate candidly, just how challenging the environment is, so that you can make informed decisions.
It is possible that we can secure space for less, depending on the lines we have secured space against at the time of your booking and we are supplementing volumes, by using the local prepaid markets to get additional slots/equipment.
As further evidence of the situations gravity we have discontinued our rate sheets until further notice, confirming the booked rate for each shipment.
You should carefully consider any decisions to delay or cancel shipments, as there is every likelihood that later sailings will be even more expensive.