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How the global shipping crisis is affecting International Removals

Posted by By Bournes International Moves - November 3, 2021

container-shipping-congestion

What is the global shipping crisis?

The global shipping industry is facing serious capacity shortages due to the knock-on effects of port congestion and bottlenecks caused by the Covid-19 pandemic.

These shortages are leading to significant delays and freight price increases for ocean shipping in every industry, from food and electronics to moving household goods.

What has caused these shipping issues?

An initial slowdown in demand when the Covid-19 pandemic hit was followed by significantly higher demand as online shopping increased (consumer spending rose as savings from reduced travel and social activity were spent on items for the home). This led to congestion in many of the world’s major seaports, the knock-on effect of which has been a shortage of containers for new consignments and continued pressures on hauliers, port operations, storage and equipment availability. This situation was exasperated by an imbalance of containers moving from East to West.

Local Covid-19 outbreaks at major ports also continue to trigger further hold-ups due to shortages of labour, with knock-on effects that can last for months.

WHAT ARE SOME OF THE CHALLENGES?

Available Space

Demand for shipping continues to exceed capacity, as an example, the UK has been showing a demand for export space at approximately 200% of available capacity. 

Haulage 

The increased demands for space are having a knock-on effect on the availability of hauliers and associated infrastructure too. 

A HGV needs to transport the container from the port to the customer residence or Mover's warehouse for loading, and then back to port, and the same again on delivery (more commonly known as haulage). 

The UK haulage industry, in particular, is experiencing significant issues with haulage due to driver shortages - the latest figures showed the UK is short over 100,000 HGV drivers. Similar situations are occurring in other countries such as the USA. 

Ports

The container is loaded onto the vessel / unloaded in a port. Prior to the current issues ports had excess capacity which meant that containers could be stored short term whilst waiting on a vessel arrival/departure. As the ports are now full this flexibility for container storage is no longer available and some ports are now implementing emergency surcharges. 

Transhipment Ports

Some shipping routes involve containers being moved from one vessel to another for the 2nd part of their journey. Some of the transhipment ports, particularly in Asia, are full and so bookings are being restricted by shipping lines where they are routed via these transhipment ports, and in fact, in some cases, routes are being completely suspended with little notice to alleviate congestion.

Covid-19 Outbreaks

If a Covid-19 outbreak happens onboard a vessel they typically must wait 14 days before they can pull into a port, generating delays for shipments on board. 

What does this mean for international moves?

These issues mean shipping lines (who are providers to moving companies) are finding it difficult to operate and are in many cases increasing prices and making last-minute schedule and route changes as they try to deal with the demand and congestion. 

Price Volatility

Historically shipping rates provided to moving companies have kept to stable limits, however in the current environment shipping lines have and may still increase rates or apply congestion/service surcharges with very little notice.

Generally, these are non-negotiable with no choice but to pay if you want to continue shipping. These costs are beyond the control of the removal company and will usually need to be passed on to the customer. 

Availability / Lead time for bookings

Pre-pandemic we could book a container with as little notice as a week or two. Currently, we are experiencing availability delays up to 6-8 weeks for some lanes to get an available slot on a vessel. This means it is really important to plan as far in advance as possible as we need to ensure that equipment, haulage and a load date that works for the shipping line and customer are achieved. 

Last-minute changes

We are experiencing some last-minute changes and service failures from the shipping lines, for example, delays in vessel sailing dates, cancellation of booked space and changing of routes or cancellation of haulage to collect or deliver containers. 

If a shipping line is unable to provide haulage on the day of container loading they may re-book, but we could then miss the intended sailing of the vessel OR they could even cancel leaving us to re-book for the next availability. Again, there is little the moving company can do to solve this (although we are trying very hard!) and this may mean planning to load via a warehouse and potentially additional charges for storage for shipments that have already been collected.  

Delivery Delays

For imports there may be some delays in delivering containers that have arrived in port if haulage is not available to collect the container. 

in What locations are container shortages a problem?

This is a global issue; however, we understand that some locations and ports are suffering more than others. We also know this is a constantly changing landscape as the ripple effects from delays in one area quickly move on to others.

Our move managers are working hard with the help of our global network to keep up to date with the latest information and will inform their clients of any specific concerns and timescales relating to their individual moves throughout the booking and planning process.

How long are shipping issues likely to last?

While local delays may clear in a relatively short time, the ripple effect and impact elsewhere can continue for many months.

Some experts, including the British Association of Removers, suggest that these issues could last well into 2022 and are only likely to resolve once the congestion at ports clears and infrastructure is improved. 

What do International shipping customers need to do?

  1. Book your move as early as possible and discuss your schedule plans early with your move manager. 
  2. Be prepared for delays, longer transit times than usual and for last-minute changes.
  3. Talk to your move manager before committing to bookings for flights or accommodation. If these depend on the arrival of your shipment they should not be confirmed before move dates are finalised. 
  4. Understand any potential additional charges up front so that you can plan and budget for those risks if necessary. 

It is important for clients to understand that there could be a much longer wait than normal in receiving shipments and that costs might be higher and subject to increase if things change.

For corporate clients relocating employees, it is important to set expectations and ensure relevant areas of the business understand the potential timescales. 

Whilst these issues are completely out of our control at Bournes, our teams are working hard to share information with our customers and set realistic and transparent expectations when it comes to shipping schedules and costs. Our industry is collectively trying to work with the shipping lines to resolve these issues but shipping vessels carry up to 23,000 containers and so we have no power for negotiation. 

We will book space for our customer's shipments as soon as we have the ‘green light’ to move (e.g., all paperwork is in place) but please be aware we are currently experiencing lead times up to 8 weeks and beyond in some cases.

Our goal is to provide you with the service we've agreed, but we are sometimes severely limited in what we can do. We are doing our best to find creative solutions and wherever possible to put pressure on the shipping lines to get our customer's shipments moving but must be realistic that our industry does not hold much power with the shipping giants compared to others, such as the huge food or electronics sectors. Whilst we know how important your belongings are to you sadly not everyone shares our view. Household goods shipments are not considered ‘priority’ freight to the shipping lines and they reserve the right to ‘bump’ the container to a future sailing, or cancel the booking altogether to free capacity for other commodities.

As soon as we have secured a booking with a shipping line we will notify our customers of the provisional date for sailing and confirm this once the container has been loaded onto the vessel.

Is this just a Bournes problem?

No, this is a global problem for every industry that involves shipping by sea, and every company in the International Removals and Shipping industry. Beware if a moving company tells you they have no problems securing containers, and request more detail as to how they are avoiding these current challenges to ensure this is a valid claim. 

We want to help you plan your relocation in the least stressful way possible, and that means being realistic. We believe in being transparent with our customers and setting clear expectations to avoid surprise additional costs or unexpected delays further down the line and we hope our industry colleagues and competitors will also offer their customers the same courtesy.

Want to know more?

Please contact your Bournes representative if you have any further questions or concerns.

You may also find some of the following links of interest if you want to understand more about the global shipping crisis.

BAR Update October 2021 - Shipping Market 2022 expectations

BAR Update: September 2021 - Current State of the Shipping Market

Supply Chain Crisis White Paper & Video (International Association of Movers)

Why the world is in a shipping Crisis (Business Insider)

Disruption to shipping could last until Christmas (BBC News)

Shipping disruption: ‘We’re doing our best – but this is crippling’ (BBC News) 

 

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