How the global shipping crisis is affecting international removals
When the Covid-19 pandemic hit, the world spiraled into a global crisis that affected every aspect of our personal and professional lives. It caused not only one of the worst health crises in recent memory, but also affected the operations of all global industries, including the shipping industry. This resulted in a global shipping crisis, which in turn took a firm hold on the international removal industry.
Now, almost 2 years after its first major outbreak, we can all still feel the results of the Covid-19 pandemic. For us at Compas International Movers, this means dealing with major delays regarding our services and lots of questions from our customers. That is why we’d like to explain how the global shipping crisis is affecting international removals, how this affects our services, how we’re coping with its effects, and the ways we’re trying to help you and our other customers as best as we can.
Main causes of the global shipping crisis
When the Covid-19 pandemic hit, it almost immediately significantly increased the global shipping demand as online shopping behaviour soared as a result of people having the stay at home and not being able to leave their homes. This significant increase in shipping demand overwhelmed the global shipping industry, resulting in port congestion and bottlenecks and a considerable shortage in both capacity and shipping containers both in ports and on vessels. All of this in turn led – and is still leading to – serious delays, freight price increases and a growing pressure on port operations, vessels, hauliers, etc..
Another big blow that the Covid-19 pandemic has dealt to the global shipping industry, was the considerable loss in manpower it caused. The virus seriously affected global health, forced people to prioritise their wellbeing, stop working and stay at home. This decrease in workforce, combined with the aforementioned increase in shipping demand, has created lots of challenges not only for the shipping industry itself, but also for all other industries depending on it, including ours.
Challenges we have to face
1. Decreased port and vessel capacities
One of the first challenges we have to face as a company is port and vessel capacities, as the demand for shipping continues to exceed global port and vessel capacities often at more than 100%.
Prior to the global shipping crisis, ports had an excess capacity that allowed for short-term storage of containers whilst waiting on vessel arrival or departure. Now that the ports are full this storage flexibility is no longer available, forcing vessels to berth outside of ports and leaving them unable to load or unload containers, resulting in port congestion and bottlenecks.
2. Increased haulage problems
Another challenge that has presented itself due to the Covid-19 pandemic is the availability of and increased pressure on haulage services.
Haulers have to transport containers from the ports to the mover’s warehouse or the customer’s residence for loading, and then transport the containers back to port and repeat the process for the delivery, thus playing an important role in the entire transportation scheme. The problem here is that the haulage industry – and the delivery industry as a whole – already had to deal with a massive shortage of manpower long before the Covid-19 pandemic. This in combination with the pandemic isolation rules and delayed driving tests for candidate-haulers has only worsened haulage problems and the effects of its consequences.
3. Overload in transshipment ports
A third challenge we have to face is the overload in transshipment ports. These ports are designed specifically to transfer containers from one vessel to another and are often used by shipping routes that require containers to be transferred to another vessel for the next part of their journey.
The problem here is that these ports are also full to the point that new bookings are heavily restricted and sometimes shipping routes are completely suspended with little to short notice.
4. Local Covid-19 outbreaks
One of the final main challenges we have to face are the continued and local Covid-19 outbreaks in ports and on vessels. If an outbreak happens onboard a vessel, they generally have to wait up to 14 days before they can pull into a port, resulting in even more delays regarding shipments, transfers and storage.
If an outbreak happens in a (major) port, this results in further hold-ups due to increased shortages in manpower, which in turn prolongs the effects of the initial global COVID-19 outbreak.
How the global shipping crisis affects our services
Increased shipping rates
Pre-Covid-19, shipping rates provided to moving companies such as us have always been pretty stable. However, since the Covid-19 pandemic shipping rates have skyrocketed and have become volatile to the point where they can literally increase day by day.
The problem is that these shipping rates are generally non-negotiable, meaning there’s no other option for us than to pay the rates if we want to secure a container and continue shipping for our customers. Also, since these costs are beyond our control, we often have to increase our own rates and thus partly or completely pass on these extra costs to our customers.
Less availability on vessels
Also pre-Covid-19, we could generally book a container and secure a slot on a vessel within a week or two. Currently, however, we are experiencing availability delays of up to 8 weeks for some shipping routes. This means we have to plan as far in advance as we can to book a container, ensure haulage, etc.. and set a loading date that works for both our selected shipping line and our customers.
Last-minute schedule and route changes
Another element that is beyond our control and that affects our services are the last-minute schedule and route changes made by shipping lines. Examples of such service failures are sailing date delays, schedule changes, route changes/cancellations, and haulage cancellations.
Although we try our hardest to cope with these service failures, there is little to nothing we can do to solve or prevent them, as most of the responsibilities lie with the shipping lines. If f.e. a shipping line can’t provide haulage to and from our warehouse and/or our customer’s residence on the day of container loading, it is difficult to re-book since we could miss the sailing date. In the worst-case scenario, the shipping line could even cancel our booking entirely, leaving us to re-book and re-schedule the entire shipping process. This could then also result in additional storage charges for shipments that we have already collected and stored in our warehouses.
How the global shipping crisis affects you as a customer
Obviously, one of the things we’re most concerned about, is how the global shipping crisis affects you and our other customers. That is why we want to communicate clearly and make sure that we do everything we can to provide you with the service that we’ve agreed upon, yet also hope you understand that sometimes we are severely limited in what we can do and that waiting times and shipment costs might be higher and subject to increase depending on the situation.
Here’s how we make sure we’re still able to provide you with our best possible service.
- Based on the actual information that we have, we always try to set realistic expectations regarding our shipment schedules and costs to provide you with a targeted estimate and potential timescales.
- As soon as you’ve booked your shipment with us and all the paperwork is in place, we will start to look for and book space for your shipment. However, we do have to say that we are currently experiencing lead times up to 8 weeks and beyond in some cases, so please be aware that it may take some time before we’re able to provide you with specific shipment information and shipment confirmation.
- We always do our best to find solutions and try to pressure the shipping lines to get your shipment out as soon as possible. However, we also have to be honest and say that our industry does not have as strong an influence on the shipping lines compared to other industries, such as the food and electronics industry. This means that many shipping lines do not consider household goods a priority freight and often reschedule or cancel bookings to free up space for shipments that are considered priority freight, such as food and electronics shipments. To avoid cancellations and re-bookings at all costs, we do try to work with shipping partners with whom we have good relations.
- As soon as we have secured a booking with a shipping line we will notify you of the provisional date and any additional costs, as well as send you a confirmation once your shipment has been loaded onto the vessel and on its way to you.
How much longer is the global shipping crisis going to last?
While some shipping delays may resolve in a relatively short amount of time, the domino effect of the Covid-19 pandemic and the impact of the global shipping crisis are expected to continue for several months. Some experts suggest that the global shipping crisis could last well into 2022, which unfortunately means we can’t provide you with a clear answer as of yet.
More information about the shipping crisis and our services
If you have any questions regarding this post, our services or your shipment with us, feel free to contact us. We'll try to get back in touch with you as soon as possible!