Home Forums Logistics Delays in Shipping likely to continue

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  • #1000569
    robdash
    Participant
    • Total posts: 87

    The delays in China leading up to Chinese New Year, have caused frustration and extra costs for shippers and importers.

    Leading up to the Holiday period, there were heavy demand on suppliers, equipment shortages, and internal logistics bottlenecks between feeder ports and major ports. Shipping lines were booked up well in advance

    At Yantian port, charity workers were feeding drivers who were stuck in the queue for up to three days
    [ATTACH=full]1724[/ATTACH]

    Many people were hoping the Holidays would provide a reset and operations would get back to normal after the New Year.

    In China, the internal logistics problems are likely to continue. Recently, some ports have seen trucks queued for two or three days to offload their cargo. That backlog should be cleared. But during the holidays, most truck drivers will go home. When they return, they will be subject to mandatory quarantine, before they can resume work. That means up to 80% of the drivers will be sidelined for two weeks, in some areas.

    In the meantime, the pandemic is leaving many shippers paying record-high rates for sub-standard service. Just 44.6% of container vessels arrived on time in December, down from 76.3% a year earlier and the lowest level in records dating back to 2011, according to an index by Copenhagen-based Sea-Intelligence.
    From all this, it would appear that shipping rates will not face downward pressure in the near future. Importers need to prepare for continued high costs, and continued delays, from China at least, for the next few months.

    This means, delays in

    • collection from the factory,
    • successful booking on a vessel/ voyage
    • sailing time, due to re-routing and port congestion.

    The good news..

    • Australia has Free Trade Agreements with lots of countries other than China
    • Your competitors will be facing the same problems (if that is good news..)

    Is any relief in sight?
    Not for a few months at least. Shipping lines say that once supply and demand gets back in balance, it may take them up to 2 months to get schedules back to normal.

    Watch this space…

    #1224817
    Chris-K
    Participant
    • Total posts: 15

    Hi Rob

    This is so true. Freight costs from China went through the roof at the end of last year and no end to the hikes this year so far. Most clients made sure they were stocked up before Chinese New Year but it’s a tricky balance.

    #1224818
    Corey
    Member
    • Total posts: 568

    very informative, great read [USER=117305]@robdash[/USER]

    Cheers
    Corey

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