Looming Christmas Crisis Due To Ongoing Congestion Chaos: VesselsValue
Global supply chain issues are threatening Christmas deliveries to retailers, as sustained port congestion seen in the US, and now parts of the UK, continues to disrupt shipping lines and the movement of goods worldwide.
Charlotte Cook, Head Trade Analyst, reports on the continued Containership congestion which is being witnessed around the world at ports including Zhoushan, Ningbo and Long Beach in LA. Felixstowe port in the UK is the latest port to witness delays.
Globally, there is currently a total of 334 vessels waiting comprising of over 2.2 million TEU. “The Containership market has been under immense pressure over the last year, with Covid related pent up demand pushing consumer spending, bad weather in China and Covid related terminal lockdowns contributing to high port congestion.
Felixstowe is one of the UK’s major Container ports, having received 927 Post Panamax, 554 Panamax, 532 ULCV and 484 New Panamax Containerships since the beginning of the year. The majority of Containers into the UK are transporting manufactured goods from export hubs in China, ranging from toys, fitness equipment, electricals and clothing to frozen food, with around 40% of the UK’s containerised imports moving through the port.
Vessels are spending longer in port than usual to unload and depart due to a pile up of Containers in port, causing disruptions to liner schedules and further reducing vessel availability. Since the beginning of the month, 31 vessels have moved through Felixstowe, equating to 281,408 total TEU vessel capacity. This is 45% less than the same period in 2020, and 51% less than the same period in 2019, suggesting that the port is struggling with turnaround times.
Some shipping lines have reported that they are diverting ships to other European ports to avoid the Felixstowe bottleneck and keep vessels moving. Marchen Maersk (18,340 TEU) was sailing en route from Tanger Med, changing course from Felixstowe to Wilhelmshaven, Germany, on the 13th October in a bid for a faster discharge.”
Things that take longer tend to cost more, so being forced to make decisions to change vessel itineraries and getting held up in congested ports can be costly for shipping lines. Retailers also make the biggest proportion of the sales at this time of year, so if retailers struggle to source enough stock and profit margins lessen, we could see the price trickle back to the consumer.
We may also see an increase in the use of alternative modes of transport to get products in stores, such as rail and air freight, although distribution issues are simultaneously impacting most parts of the supply chain.