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Update June 2021Published on 4 June 2021
In previous updates, we have informed you on the effects in the global supply chain due to the COVID-19 pandemic. In this update, we would like to give you an overview of what we have seen happening over the last few months and what we expect in the months to come. We would like to take you through our expectations of how the global supply chain will impact global mobility in 2021.
We see all kinds of challenges at present in both APAC, EMEA as well as in the Americas. Currently, there is a disbalance of available containers globally. This disbalance was increased after the Ever Given, a 220,000-ton mega ship with a 20,000-container capacity, ran aground in Egypt’s Suez Canal from the Red Sea. This blockage led to significant disruptions to global trade, skyrocketing shipping rates and a further increase of energy commodities. At present, we are seeing the huge impact of getting containers from APAC to and from the Americas. Prices have gone up by 300%+ in some instances and the end is not in sight. Expectations are that the market will stay very volatile till the end of the year and we foresee prices going up even further on some lanes. Due to the significant container shortages, sailing dates and transit times are uncertain and many shipments have to go via SIT (Storage In Transit) to await available containers.
Many global movers including partners within our network have already indicated that they are unable to facilitate any more moves until the end of the summer. These notifications have come from APAC, North America as well as Europe. In all markets, domestic moves are booming and there is a shortage of labor, trucks and materials. We are also seeing a peak in pricing as a result of the current market pressure. These issues will affect cost pricing as well as transit times and will likely cause further disruptions. People may not be able to move at the desired point in time as there is just no capacity. For instance, it is almost impossible in the present market to book a domestic move in the USA this summer.
Other Costs Rising
Packing material costs for wood, carton, and plastics are rising fast due to global demand. We have seen a 50% increase so far and costs are expected to rise another 50% in next few months. In some areas there is no availability of materials anymore and that is expected to continue for a while. This will lead to a significant impact in the cost price of the move.
Labor costs are also rising globally. Just as an example, in our HQ in the Netherlands an agreement has been reached between the unions and the company associations to raise the wages by 6.5% over the next six months (in two phases). Also, in the largest volume market in the world, the USA, we are seeing a sharp growth of labor costs as there are massive shortages. Furthermore, we foresee a rise in transportation costs due to surcharges during the relocation process.
One of the biggest topics in the present market is the need from corporates and governments to relocate families in a more sustainable way. This has already had a global impact. Voerman is leading the industry with a new initiative that we will launch in the next two weeks. The program will make the environmental footprint of a move measurable and offer a compensation tool. More information about our new sustainability proposition will follow in a couple of weeks. Are you curious? Get a Sneak Peek of the program on our Monthly Message: https://www.voerman.com/monthlymessage/
What Do We Do: Expectation Management by Customer Service
Our customer service staff will work closely with the families moving as well as our corporate contacts to proactively keep everyone updated. Over the next few months, we will look to secure dates for packing or delivery as soon as orders are in and book the transportation promptly. Please bear in mind, however, that it may be difficult in the coming months to pre-confirm dates for transferees due to the ongoing and changing immigration or travel restrictions. We will count on flexibility from both sides to meet the preferred packing and delivery schedules.
Global Network & Connection – To Keep You Informed
Although it is partly a crystal ball that we are trying to look into, we are actively involved in industry associations in all continents to ensure we are prepared to serve our clients in the current market conditions. Our supply chain team has increased the service capabilities for us as a Group and The Harmony Relocation Network in helping us a lot to create operating capabilities. Our account managers will keep you updated as we progress in these next few months.
We are happy to continue to serve you and your colleagues.
Wiebe van Bockel – CCO Voerman Group