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Update SeptemberPublished on 2 September 2021
In this new update, we would like to give you an overview of what we have seen happening over the last few weeks, especially on the freight side. Initially, we thought the impact of container and labor shortages and port congestion would affect our industry for only a few months, but as looks now we will have to deal with the new reality for many more months to come. The impact is massive, and we haven’t seen anything like this in last 40 years. We want to keep you informed of what is going on in the international relocation industry and the impacts due to the COVID-19 pandemic, as this will have an influence on almost all relocations we perform globally.
In general, the situation in recent weeks has not improved since our last update. It has even worsened in some parts of the world due to partial shutdowns of ports in China because of COVID and the complete lack of capacity of containers in various parts of the world. This has been the situation for the last four to five months already and is expected to continue for at least six more months. There are even more challenges on the horizon. As mentioned in previous updates, we are seeing all kinds of challenges in APAC, EMEA as well as in the Americas. Currently, there is a global disbalance of available containers. Additionally, several local conditions have had a significant influence.
Pricing for sea freight is at an all-time high, with on average ten times higher spot rates than in an average year. Especially all export from APAC and freight to and from North America has been severely affected. We would like to share some articles that demonstrate the situations in the US and APAC:
- Situation in Asia (port of Ningbo) – CNN business (including two-minutes video by CEO Maersk)
- Situation in California, Freight waves – American Shipper and Business Insider
There has been significant cost impact due to a lack of capacity globally. The biggest problem at present is that in addition to the high prices of containers, the industry is contending with non-availability of containers and vessels. On average, we need to wait four to five weeks to get a departing vessel to take a container, and for some locations the wait increases by weeks and even months. This effectively means that most shipments go via SIT (Storage in Transit) to await available containers and a departing vessel. There is almost no capacity left for intra-European shipments. All carriers are fully booked and are operating on less capacity than prior to the COVID period.
From a labor perspective, there are multiple challenges in the world. In addition to the fact that it is peak season and it is difficult to get all jobs secured with quality labor; we also see the impact due to COVID. In Sydney, capacity is down to 90% due to new regulations and in New Zealand moving is not possible during the current lockdown. Most of our moving partners in Europe, APAC, EMEA as well as in the Americas are fully booked until now. the end of August, schedules are getting full and these capacity issues will continue. We have a dedicated updated COVID impact list per country which we can share individually to our accounts. If you are interested in receiving this information for (a) specific country(ies), please contact your account manager.
What do we do?
Our customer service staff will work closely with the families moving as well as our corporate contacts to proactively keep everyone updated. We are also actively looking at different transportation modes (e.g. rail from China to Europe) and proactively booking capacity in high volume markets on available capacity. 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 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, and we are committed to serve.
What can you do?
For new initiations, please reach out to us as soon as possible, so we can properly understand the needs of the transferee and the transit time requirements. This will allow us to set realistic expectations at the start of the relocation journey. We suggest that you reach out to us about the COVID impact, transit times and/or costs as soon as possible for any new relocations.
Relevant information can be found online, and we would like to share some recent articles that provide more insight into the above-mentioned situation.
- ING piece on shipping costs
- MC Kinsey – What is going on shipping rates (including an explanatory video)
- Freightos – Shipping & Freight Cost Increases, Freight Capacity, and Shipping Container Shortage (including an explanatory video)
Global Network & Connection – To Keep You Informed
As we near the end of the summer and see everybody gearing up as schools restart and people slowly go back to offices, the global relocation industry is still going full speed ahead. We expect a dynamic marketplace to continue for next few months at least. We will keep you updated regularly and please reach out to us if you have any questions. We are here to serve you!
Wiebe van Bockel – CCO Voerman Group