A number of challenges currently affect the freight transportation sector
23rd December 2021
Robert Tedd, Freight Manager at Spatial Global provides this overview of where we are and the likely changes.
Getting you the best possible shipping solutions
Spatial Global operations continue to work as advanced as possible in order to secure the best possible shipping solutions for client deliveries. We are in continual dialogue with all our service partners, and for a large part have managed to manoeuvre with some contingency planning, many of the challenges to which we’re presented. This thanks to our relationships with hauliers and breadth of relationships across the sector.
What's happening with ocean freight'
Without doubt pressures remain within the ocean market. For imports from China, prices continue to dominate the discussion but that has been so for almost a year now. The most impactful recent trend is schedule disruption & delays.
Having accepted the cost and booked some freight, made your production or sales plans, almost every ocean freight journey is missing the schedule by several days. It is a vicious circle, the ship that was late arriving in Felixstowe, then had to wait to be discharged which means it misses its return window to the Chinese ports. Port congestion, shortage of haulage and container shortages are all contributing to this. The impact is also on export routes, partly from the delays but also changes to routes with some direct routes no longer operating to/from UK ports but working on feeders from the continent.
What's happening with air freight
Capacity has not yet returned to anything like pre-covid levels. Passenger flights with the associated cargo capacity are still well below pre-pandemic levels and whilst cargo only capacity has been increased significantly by airlines, specialists and indeed freight forwarders demand is still outstripping supply.
The result is high process with a current short-term peak season increase, and a delay from booking to loading of several days up to 2 weeks. The trend will only turn post Christmas peak with a slow and steady increase of capacity with hopefully improved service and price.
What's happening with European road haulage'
The carriers on this route were shocked by the impact of Brexit. They thought they were prepared but the additional administration and lack of readiness by shippers quickly resulted in backlogs and delays. The carriers had changed process to add time for the administration but were beaten by events. Many sectors that were well prepared and working on dedicated routes fared ok.
The LCL or Groupage market was hardest hit. Carriers extended the lead-times on routes to allow them to check all of the paperwork and apply for the necessary permissions to travel and transit within Europe. That seems here to stay, so what was a 4 -day delivery is now 7-10 on many routes. The service has settled down, running to the new schedule and enough capacity. However there are changes in January 2022 on the import leg. The UK had allowed a long transition, but from next year the process in each direction will be the same. Good news is that shippers seem ready with the paperwork, it will be the transit arrangements that hauliers need to book that could be a challenge, although any impact we expect to be small and short.
What's happening with UK road haulage'
Coverage of Full container haulage is extremely tight and some hauliers are working to bookings a month in advance. In order to retain drivers road operators have been forced to implement either surcharges (for example driver retention) or increase drayage rates across the board.
With the onset of Winter, port operations are likely to be further hampered and in combination with high volume arrivals & terminal congestion some hauliers are not accepting timed delivery requests working to either an AM / PM windows only. LCL Deliveries are also now needing to be booked as far in advance as possible although this is mainly down to Peak arrivals / departures. Occasional congestion through late vessel arrivals / departures or unpacking can also adversely impact pre-booked deliveries.
Our team remain wholly committed to delivering your shipments
With all this said, we have to accept from time to time that in spite of our best efforts there can be occasion where a number of exceptions can present in unison and adversely affect performance levels. Please be assured that our team remain wholly committed to delivering your shipments as booked and will exhaust every available option to ensure cargo gets to where its required, when it’s required.
With predictions to market conditions not revealing any imminent improvement, we respectfully ask you to continue to pre-advise our team at the earliest opportunity (in-line with your order book and production forecasts) to your future shipment requirements. It’s imperative communication lines are open and that all stakeholders, buyers & sellers can best prepare for unexpected schedule changes.