“It will get worse before it gets better” say LOFA.
Congestion is causing severe disruptions at the UKs three main container ports. LOFA members are seeing shipping lines not being allowed to return empty containers to the ports because they have exceeded their agreed allocations. Consequently, ports are putting a block on them returning any further containers in an attempt to prevent congestion at the terminals. In the past shipping lines have used surrounding off quay container yards for overspill storage but this again is an issue because container yards do not operate the same hours as the ports.
Major congestion disruptions and misery at all three ports, Felixstowe, Southampton and London are being further compounded by the added introduction of COVID 19 measures.
Right now, the situation is worsening, this crisis is expected to continue into next year, or until there is a let up in the current volume levels, which is leading to carrier companies introducing port congestion surcharges.
This lack of space and container issues will result in price hikes coming in as early as next week. This crisis has led to many carriers refusing bookings to the UK and even talks of UK ports being omitted on some vessel rotations. The container capacity issues in the market will inevitably lead to substantial increases to sea freight costs, and the lack of availability will also lead to delays in the delivery of containers to UK destinations.
The situation will become worse before it gets better for logistic providers and UK importers. It is hoped that the current backlog does not continue into Chinese New Year so that business can recover by the time we reach February 2021 and if not by the time we are all faced with the challenges that Brexit will bring.
This is troubling news for LOFA members and the industry as a whole, leisure products start to hit ports as early as December. The UK appears to be in a particularly difficult position, the congestion and delays which appeared to impact Felixstowe initially has now spread to other ports, resulting in some vessels having to “cut and run’ before discharging containers. The UK port issues have now led to one or two carriers unofficially communicating their refusal to take bookings to the UK from Asian locations during November. It will therefore follow that their vessels will not be calling at UK ports.
Of course, the peak season, which has been heightened by six months of global trade being pushed into four this year, cannot be expected to continue indefinitely and is usually driven by Black Friday and Christmas sales. So, at some time, in the not too distant future, there must be some much-needed respite for UK ports and business, that said, with COVID-19 starting to peak once more, the current national lockdown and Brexit on the horizon, the next few months are still likely to be extremely challenging time for industry as a whole.