Freight

Suez Canal Blockage Means Challenging Month For Forwarders and Ports

Ocean ports and freight forwarders are bracing for a challenging month as the aftermath of the Suez Canal blockage reaches Europe and Asia affecting space, equipment and other parts of the supply chain.

Ocean ports and freight forwarders are bracing for a challenging month as the aftermath of the Suez Canal blockage reaches Europe and Asia affecting space, equipment and other parts of the supply chain.

Analysis published by Sea-Intelligence indicated that the main impact of the blockage would last until early June, in terms of liner schedules on the Asia-Europe services. Freight sources are already reporting of some European ports filling up as container lines, that had been delayed due to the blockage, discharge cargo wherever they can in order to turn ships around as quickly as possible and return them to Asia. It is suggested that this practice is being prioritised over European export cargo.

Freight forwarder Flexport highlighted in its recent market update that there had been increased rates imposed on Asia-Europe services from most carriers in the form of GRIs from 15 April “as a result of tight space and equipment due to Suez Canal situation.”
The forwarder recommended at least 21 days booking notice prior to the cargo ready date for Asia-Europe services. Flexport added that the ripple effect from the Suez Canal blockage “will become very visible in the next few weeks, with quite a number of blank sailings from Ocean Alliance and The Alliance.” It added that capacity was “severely reduced in weeks 16, 17, 19 and 21, noting that the “equipment shortage has become very serious again, especially out of Shanghai and outports. Both space and equipment will be very challenging in the coming month.”
They reported similar findings on the services from Asia to the East Coast of the US which was impacted by Suez Canal capacity issues and had also seen a GRI on 15 April.
Flexport also added that carriers were now “starting to look ahead to the 2021 contract year in the midst of extreme challenges to the USEC and inland locations. Premium remains the entry point to the market on almost all lanes. Transloading services are becoming more essential to avoid challenges to the USEC.”

Flexport noted that Europe-North American routes were also severely impacted with a GRI implemented on 15 April and another likely from 1 May. It recommended advanced booking notice of at least 5 days prior to cargo ready date. This market was “expected to remain dynamic through Q2 as capacity stays heavily constrained,” urging customers that, “booking early is key to securing space. Use premium products for the urgent cargo needing higher reliability.”

Port of Felixstowe Operational Update

In a weekend update from the Port of Felixstowe, it stressed that they were currently “fully operational,” adding: “This week will be very busy s vessels delayed and diverted due to the recent Suez Canal blockage arrive at the same time as scheduled vessels, although no significant delays are expected.
“To help manage the extra volume, extended Sunday opening hours for collection and delivery of containers will be available up to and including Sunday, 9th May.”
European intermodal operators have reported congestion at some European container ports with wait times for the handling of barges taking 41 hours in Antwerp and 34 hours in Rotterdam. As a result of this European freight forwarders have outlined preparations in anticipation of the challenging weeks ahead.

Forwarders Make Preparations

Norman Global Logistics mentioned last week that it was anticipating congestion in North European major ports that were likely to reach critical levels over the next four weeks as terminals try to work through the backlog of fully laden ships. They noted that some lines had stopped taking new bookings entirely for the moment.

The company was block-booking delivery resources in an attempt to clear the containers as quickly as possible after the vessels arrived. “Our ops teams are working tirelessly to keep supply chains optimised and all NGL customers can use the live tracking links on their daily nForm shipment report to see status summaries and precisely where their shipments are.”

Metro Shipping, a UK freight forwarder last week explained that lockdown restrictions easing in England attributed to predictions of a steep rise in sales with data confirming that consumer confidence was at an all-time high.
“And with global supply chains likely to suffer ‘Suez related’ disruption for several months, orders will need to be expedited and replenishment assured, using a blend of modal and transit options, if they are to maximise the revenue potential of this opportunity.”

Potential Delays Due to Suez Canal Blockage

Metro Shipping reported that although lines such as Maersk had reopened its online bookings for spot shipments and short-term contracts, bookings could only be accepted subject to port capacity and equipment availability.

They added: “The hope is that the post-Suez impact on ports in Europe and the UK will pass quickly, but shippers should expect delays and equipment shortages at Asian ports to continue, because we have already missed two weeks in terms of getting equipment back to Asia. Asian ports will feel the effects of the Suez disruption far more, with schedules affected later in the second quarter, making it even harder for carriers to get their schedules under control and empty containers positioned to regions that need them for loading – this situation is already becoming critical again and to a similar situation experienced before Chinese New Year.”

On the Asia-North Europe trade lane, Metro said “the volatility being experienced with capacity was more significant and longer lasting than on the Mediterranean, with the full effects expected to be felt in Asia in the week beginning 24 May – over a month away, which demonstrates the longevity of the situation and time it will take to recover anything like a normal service situation.”

They also noted that “Global supply chaines will continue to be impacted by the fallout from the Suez Blockage for some weeks and possibly months,” highlighting the recent launch of a real time GPS application on its MVT supply chain visibility platform, “which is monitoring all Suez-impacted vessels, with consignment view to SKU level.”
Metro added: “We are flexing, updating and adding alternative solutions and recoveries, across all modes of transport and geographies to keep supply chains fully functioning.” It said that interest in its air freight services had increase massively as a solution to ocean freight delays encouraging shippers to contact the company without delay if they are looking to critically import or export pending Asia shipments.