UPDATE: Freight – 08 September 2021
Don’t leave your Christmas shopping to the last minute!
If like me, you prefer to put off your Christmas shopping until the last minute, you could be in for another year of high prices and slim pickings. The same applies to your wholesale business needs. Freight prices continue to go from bad to worse with additional charges being added everywhere.
What’s more worrying is that limited space on ships and congestion throughout the supply chain is going to lead to many shipments not arriving until 2022. Just today we heard that shipments out of China are already fully booked until the middle of November, which means the chances of placing an order today and getting this before Christmas is looking increasingly unlikely.
Below is an excellent summary of the situation as it stands today and makes for entertaining, if not a little depressing reading.
If you want to do more than just be depressed, here are three things you can do to help maintain a level of control:
- Buy early – whether it’s Christmas presents or essential supplies for your business, get in early and secure stock before the panic
- Lock purchases in before price increases – our prices are going up from October and this is happening across the market, try to place orders prior to the increases as costs are only going up in the foreseeable future
- Speak to your wholesaler about future demand – With stock likely to be in short supply, the winners will be those that are most organised and have placed forward orders or communicated their needs to their suppliers
Don’t be left scrambling in the lead up to Christmas, get organised, place orders now and be a hero (both personally and professionally).
Summary below from Jacqui Garrnet, Operations Manager at EIF:
Another broadcast with little, if any, positive news to report in the world of global shipping.
So without further ado, we’ll keep this as brief and concise as possible. I will also attempt to minimise the use of the word “unprecedented”, but in reality it could be used ad-nauseum in this broadcast.
The Brown Marmorated Stink Bug (BMSB) 2021-2022 season : The new season is upon us. Essentially the rules are very similar to last season :
- Affects all “target high risk” shipments between the following dates from the port of exit; September 1st, 2020 through to April 30th, 2022. The number of chapters included in both “target high risk” and “target risk” categories have been reduced slightly.
- Poland has been added to the list of “target risk” countries.
- Whilst cargo moving via air is not yet considered as falling under the BMSB banner directly, the department has advised that there will be a level of random checks on airfreight as there have been instances of BMSB in air cargo.
The department is requesting that fumigation take place offshore where possible, but in the current environment (read global chaos) this may not be practicable in many instances and it may be advisable to have the containers treated upon arrival into Australia. Please speak with us in regard to your own individual circumstances for details.
General Rate Increases (GRI), Rate Restoration (RR), Peak Season Surcharges (PSS) : We receive notifications of these increases on a daily basis and to some degree this is expected at this time of year in the lead up to Christmas. However, it is not just the regularity and volume of these notices, but the values of these increases in already highly inflated markets. One staggering example is that one of the major shipping lines has announced a PSS from September 10th on containers from North Europe & Mediterranean ports to Australia and New Zealand – for how much you ask?? US$1200 per 20’ container and US$2400 per 40’!! But wait, there’s more and I quote “In a continued effort to provide its customers with reliable and efficient services”. The very real truth is that the “service” offered by the shipping lines has deteriorated greatly during COVID and shows no sign of improvement.
Please note that increases are not simply with shipping lines but across all links in the supply chain – trucking, rail, ports/terminals and air freight. No sector has been exempted from the scourge of spiralling costs.
Congestion : This is a major problem, again across the entire supply chain. Whether it be at pretty much every major port on the planet, rail hubs, truckers yards or freight depots it is having a major effect on how quickly your freight moves from A to B. Do not underestimate the effect of a cyclone in Shanghai or COVID-19 outbreak at the port of Ningbo. These events have far reaching effects around the world and cause on going disruptions in most other trades.
Sailing schedule integrity : Many factors at play here, congestion being one. But there is no doubt that schedules in pretty much every trade are at best erratic, but most are in a state of chaos. Constantly changing vessel cut-offs continue to be a daily challenge resulting at times in additional charges as containers that have just been loaded have to be held at a truckers yard pending acceptance by the port or the rail terminal. This issue is not going away.
Cancellation and amendment fees : Such charges have been around for some time, they’re nothing new. However we can see a trend where many of the shipping lines particularly have or are introducing various fees when a booking is cancelled or even an amendment made. All in the name of maintaining “high levels of service” – yeah, right.
When is a booking a booking? Until the shipping line decides it’s not. Unfortunately, this is no laughing matter in the shipping game, but rather a real issue. Lines regularly take bookings only to roll onto another, later sailing or in some instances just cancel the booking altogether – without explanation and at best a feeble, insincere apology.
We manage these instances to the best of our ability, but you need to know that this is not uncommon.
Also, the length of time it takes for a line to confirm a booking has blown out from what was traditionally hours to days or sometimes over a week.
US Customs intervention : Unconfirmed reports state that US Customs are running an operation that has seen a dramatic increase in the number of containers being pulled for inspection in Los Angeles. One shipping line advised that on a single sailing that over one hundred containers had been seized for inspection – this is unprecedented. Apart from causing further delays in shipments departing/arriving it also places the burden of costs onto the cargo owner. We can only hope that the “operation” is finalised sooner rather than later.
We do thank you for your continued support. There is no question that we are all in very trying times in many aspects of our existence and most certainly the shipping sector is no different – we thank you for your patience as well.
Jacqui Garnett – Operations Manager