Global transport crisis affects everyone, including consumers
Druten – The global transport industry is currently experiencing a huge shortage of containers and lorries. Unfortunately, ICA’s regular carriers are also being affected. Due to the current situation, it is not always possible to load a container or lorry to full capacity. Loads are sometimes diverted to other vehicles operated by different carriers and not all products are delivered on time. Many sectors are feeling the impact of longer delivery times. In the wood industry, for instance, prices have doubled over the last six months. The expectation is that the rise in costs will soon be passed on to consumers.
According to Lars Jensen of Denmark-based shipping consultants Vespucci Maritime, the ongoing disruption to shipping at China’s major container ports in Guangzhou and Shenzhen, caused by the recent COVID-19 outbreak, has already dealt a bigger blow to the industry than the Suez Canal blockage. Jensen claims that you can easily quantify the impact on freight with a simple calculation. The ‘Ever Given’ that was stranded in March for six days had approximately 55,000 TEUs (twenty foot equivalent units) on board. Six days multiplied by 55,000 comes to 333,000 TEUs.
The current situation at China’s southern ports is much more harrowing. Jensen has calculated that at the Yantian International Container Terminal alone there are more than 25,500 TEUs that cannot be shipped. The terminal is operating at only 30% of its normal capacity because of the restrictions in place to control the spread of COVID. The latest update from Maersk concludes that the congestion has been going on for at least 16 days, resulting in 400,000 TEUs of stranded containers. This excludes numbers from other terminals, such as Nansha and Shekou.
With the number of COVID cases increasing, some of the region’s ports are being avoided, which is impacting shipping schedules. Jensen estimates that Maersk’s prediction of a 14-day delay is too optimistic. It is expected that container shipping will be affected for at least another five weeks. Incidentally, the container market had already been operating at barely tolerable levels well before the new outbreak in southern China. It is now even more difficult to transport empty containers to Asia.
As mentioned, ICA is also experiencing the effects of the container and lorry shortages. Neil Terwisscha van Scheltinga, responsible for planning incoming freight at ICA, reports that a number of customers will be affected in one way or another.
“We always try to mitigate, but unfortunately we are dependent on external parties and challenges that we could not have anticipated in advance”, explains Van Scheltinga. “I recall being able to alleviate the situation in March 2020 by extreme procurement. But the current situation concerns me as a lot of Eastern European tile wholesalers are reorganising their supply chains. Before, they mainly purchased from Asia but are now shifting their focus to Italy, Spain and Turkey. This is good for factories in these countries but might negatively impact existing clients such as ICA because any increase in demand could exceed current production capacities. But ICA would not be ICA if we failed to find a solution.”
Source: Nieuwsblad Transport
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