The effects of COVID have been felt throughout the logistics community since day one. However, this month alone, the shipping sector has felt the knock-on impact as boats are stranded waiting to berth, the outdated ports are stretched to deal with the ever-increasing capacity of ships, and container prices reach new highs; increasing by £6,000 in cost since the end of April.
The issue originated with the pandemic; carriers cut sailing without anticipating consumers to purchase products online at a very unpredictable rate. The problems were worsened by the Suez Canal blockage in March and the Ningbo-Zhoushan port closure in May.
Ningbo-Zhoushan, one of the world’s busiest container ports had a coronavirus outbreak that has led to its partial shutdown. Ningbo-Zhoushan in eastern China is the world’s third-busiest cargo port and threatens more disruption to supply chains ahead of the key Christmas shopping season. Following the outbreak in May, the port’s capacity was reduced by a fifth, creating a domino effect on international shipping.
Such problems have had knock-on effects; stock shortages, delays to deliveries, and price increase. All of which inevitably frustrate customers due to the pandemic-driven boom in e-commerce sales. The pandemic has piled on the pressure further, raising costs and hitting margins, which has forced some ports to cut expenditure by reducing staffing and increasing automation.
showing their need for investment and truly how overwhelmed they are” – John Manners-Bell, chief executive at consultancy Transport Intelligence.
The increasing surge in shipping prices and bottlenecking at ports worldwide have only worsened the situation within the supply chain industry. Importers and exporters are attempting to regain the cost spiked by shipping costs that’s at a massive increase, nearly up by half of last month.
Kuehne+Nagel reported 353 container ships stuck outside ports around the world in early August, these doubled numbers previously recorded in the year. US ports such as L.A. and Long Beach had up to 22 ships waiting for up to 12 days before they could drop anchor to unload their contents. As of the 24th of August, more than 362 vessels of the major carriers are anchored off ports, as many ports on every continent are facing disruptions in their operations (seen below)
Whilst this has certainly been difficult for everyone in the industry, here at Firstpoint we are proud we have risen to the challenge and proven our ability to adapt! Thanks to our large network of reliable partners and a host of solutions to offer, we have continued to support both new and existing clients through a very difficult period.
If you have any questions or issues you just want to talk about contact the team on 03450303777 or operations@firstpointlogistics.co.uk
To ensure you stay up to date with this situation, we’ve provided a few sources that should help to do so:
FT: Shipping bottlenecks set to prolong supply chain turmoil
Seaexplorer: Monitor current disruption for your shipment planning
Freightos: Global container freight index
BBC: Ningbo: Global supply fears as China partly shuts major port