Global supply chain impact is caused by imbalance in available freight space and equipment.
The supply chain consequences of the Suez Canal blockade in March will be clearly felt in the coming months. In our operations this will mostly affect the operational activities and pricing for the coming period. Where there were hopes for more stability, prices in container shipping are still sky-high. Also the tariff levels may reach new record highs as of May 1. We continue to be confronted with limitations and delays due to blank sailings, equipment shortages and congested ports worldwide.
Partly because of the aforementioned congestion in the Suez Canal, we are also seeing extra pressure in the availability of containers and the spot market. The shortage of ship space and containers will largely persist this year, resulting in high transport rates and operational restrictions. This is predicted by a maritime research firm Drewry in its latest report about developments in the container market. The prospects also note that there will be considerably more orders for the construction of new ships. There are 1.77 million TEU across 166 ships ordered in Q1 only. However, whether this capacity expansion will eventually lead to the extremely low rates of few years ago seems unlikely, according to Drewry.
Our advice
We would like to advise you to pay attention to matters listed below in order to limit any nuisance and to anticipate the aforementioned market situation:
- We recommend booking your shipments well in advance. This enables us to provide you with the best possible arrangements.
- Prioritize the most critical shipments as capacity is scarce and we face constraints and delays.
- Include longer lead times in your supply chain calculations. Keep in mind that the average delay is currently almost 7 days.
The aforementioned challenging and volatile market situation puts a lot of pressure on our operation. Therefore, we must continue to emphasize that the options are limited and ask you to continue to take into account possible delays in the coming period.
We are here for you
We at HEC-Holland do everything we can to continue to serve you optimally and to keep any inconvenience to a minimum. Please feel free to consult your account manager and ask for our possibilities and solutions. We will also keep you updated related to this theme and future developments.
If any questions arise, please also get in contact with our team!