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Update March 2021Published on 30 March 2021
In this update, we would like to inform you about an incident which is all over the news now. This event will further impact the global supply chain on top of the delays, shortages and price squeezes being experienced due to the COVID-19 pandemic. We would like to take you through our expectations of how the global supply chain will impact global mobility in 2021.
Latest update 29th of March 2021
The Ever Given, the 220,000-ton mega ship that blocked the Suez Canal for nearly six days, was freed on Monday. A fleet of tugboats — helped by raised tides — wrenched the bow of the four-football-field long behemoth from the canal’s bank, where it had run aground last week.
The Ever Given, a 220,000-ton mega ship with a 20,000-container capacity, completely blocks Suez Canal
The Ever Given, a 220,000-ton mega ship with a 20,000-container capacity, ran aground after being blown by strong winds while entering Egypt’s Suez Canal from the Red Sea. It has completely blocked the passageway that is home to as much as 12% of the world’s seaborne trade and through which 50 container ships normally transit per day.
This blockage will lead to “significant disruptions to global trade, skyrocketing shipping rates, further increase of energy commodities, and an uptick in global inflation,” as mentioned by JP Morgan. Source: CNBC
Issues Global Supply Chain in 2021
We foresee a difficult year going forward in 2021. This new blow will result in higher prices for freight and delays in household goods shipments because of slower transit times, congested ports, lack of containers and sailings and the current status of the Corona pandemic. We are also still dealing with the effects of Brexit which has had a massive impact on the Continental Europe & UK trade (and vice versa). The port of Rotterdam is now the real gateway to Europe, and we are also seeing a lot of shipments being routed via the Netherlands for delivery in the UK. Also, delays and customs clearance cost is part of relocating to and from the UK now.
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. We do, however, recognize 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. Furthermore, we foresee a rise in transportation costs due to surcharges during the relocation process.
Expectations of consequences for the global supply chain
- Continuing surcharges due to extra protection and restrictions related to COVID-19
- Shortage of containers due to shortage of capacity of ships (currently 40,000 TEU waiting for transportation)
- Fast rising cost of sea freight (e.g. Asia – Europe has seen an increase of ca. USD 3500 per TEU)
- Expected fast rising cost of sea freight from Europe to the Americas (prediction is 300%+)
- Fewer number of transits by ship or air carrier (various carriers don’t take household good shipments anymore)
- Airfreight costs to remain at a very high level for a while
- Increase in fuel charges after lowest points
- Heightened border controls, causing delays in intra-European traffic
- Storage charge increase due to high demand
- 20 – 30% overall decrease of operating capacity in global market
- A market picking up pace again towards year end 2021 and the expectation that we will see growth back when trust is established in international travel
- Packing material cost is rising fast due to global demand. We see 50%+ growing cost on the various cost layers and expect it to keep rising
Global network & connection – to keep you informed
It is partly a crystal ball that we are trying to look into, but we are actively involved in industry associations in all continents to make sure we are prepared to serve our clients. 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