As we approach the peak international moving season, the worldwide shipping industry is experiencing a tidal wave of irregular, delayed, or cancelled services, last-minute schedule adjustments, and price hikes for sea shipments.
This situation has been brought about by 2 major factors:
- Post-pandemic correction
- The Russia-Ukraine conflict
It may not be possible to pinpoint exactly which factor led to what effects, but the consequence is the same: irregularity in an industry that traditionally runs with the efficiency of a Swiss watch.
What are these disruptions?
Immediate Effects
1. High Demand for Shipping Containers
The main reason for this is an unanticipated increase in worldwide demand for products and services as a result of pent-up demand and ongoing strong economic recovery in many countries throughout the world following the removal of pandemic restrictions.
As a result, demand for container shipping is high, while capacity has decreased.
According to a recent British Association of Removers update, there are two containers waiting for every container spot currently available.
2. Container Reductions
The availability of vessels has been reduced as a result of port or ship lockdowns, as well as COVID-related manpower shortages.
Lockdowns that occurred and were released at different times in different places produced a global imbalance in the availability of empty containers for fresh shipments.
Empty containers are clogging up ports, and shipping slots are in short supply.
Long-term storage for containers at and around ports has become severely constrained as a result of poor availability and numerous ports operating at (sometimes decreased) capacity.
3. Driver Shortages
The pandemic has increased driver shortages in several countries, impacting delivery to retailers and producing shortages of commodities in numerous areas.
These delays have had a considerable impact on the availability of slots for transporting and collecting containers from and to clients’ locations as well as from and to ports.
Not to mention how Brexit has impacted the trucking industry in the United Kingdom.
Trickle-down effects
Here are some of the ways that the disruptions discussed above have adversely affected the International Relocations industry:
1. Longer Booking Times
With availability at an all-time low, booking a seat onboard a ship is said to take up to two months, if not longer.
Prior to the pandemic, international moves could be made on short notice; however, extensive planning is now required.
If you intend to move internationally in the summer of 2022, we advise you to get your affairs in order as early as possible.
2. Big Price Increases
Due to a scarcity of storage, containers, and vessel space, the potential for missed slots to have a significant impact is exceedingly high.
The lower supply coupled with increased demand for shipping containers has naturally led to a higher cost of hiring shipping containers. Container prices have increased by about 100% in the last 18 months, from X to Y for a 20-ft container and A to B for 40-foot containers.
Shipping lines are increasing their base freight rates while also imposing congestion or service surcharges, and they do it with little warning.
Demurrage is another major concern.
Most countries including Kenya and South Africa have reduced the demurrage-free days to 5 days. India has actually reduced theirs to 3 days.
In extreme cases, especially in Europe, ports are tacking on additional port congestion surcharges of $115 for 20-ft containers and $240 for 40-ft containers.
3. All-round Unpredictability
Shipping and its linked logistics industries are precipitously balanced, requiring only minor disruption to cause large delays in shipments or price hikes.
Current COVID outbreaks, as well as the Russia-Ukraine conflict, are aggravating the situation and could result in abrupt staff shortages and delays in supplies.
Shipping lines have completely halted service to some ports and decreased the number of monthly cruises in others. This is inconvenient when it comes to planning and scheduling.
Bookings to numerous ports in North and South America have become extremely tough from the Kenyan port of Mombasa.
The time it takes to sail from Mombasa to West African ports has also increased significantly.
4. Storage In Transit
While Storage-in-Transit (SIT) has always been an element of foreign removals, it has lately been enhanced because container stowing at customers’ residences is difficult to schedule.
Goods are being held for extended periods of time before containers become available, and this comes at a cost. It is extremely difficult for an international moving business without a storage facility to provide reliable service at this time.
When will the global shipping problem end?
This is difficult to predict and we can only hope that the situation will normalize within 2022.
Recommendations for moving internationally in the summer of 2022
- Listen to moving experts’ advice just as much as you should do your own study on what’s going on along your route.
- Maintain open lines of communication with your moving company to stay informed because situations are continuously changing.
- It is critical to use online tracking tools.
- Keep an open mind when it comes to sailing schedules, especially when you plan your lodging while you wait for your container to arrive.
- There are uncertainties due to the Shanghai lockdown, and the Beijing Omicron effect. Not to mention one of the major transhipment hubs ( Colombo Srilanka) for cargo from and to Africa is under extreme congestion with Indian porta now being opted as the transhipment hubs hence longer transit periods.
Moving companies all over the world rely on international shipping to run smoothly so they can provide similarly trouble-free services.
The aforementioned challenges have made this incredibly difficult, resulting in price instability and increases that have unavoidably impacted clients.
We are doing everything we can to lessen the overall impact and continue to make the relocation process as efficient and stress-free as possible in the areas where we have influence.
