A great report form our local Fox New station discussing the supply chain issues that is plaguing the industry right now. Rainier’s own, Rich Haas, got to chime in with his two cents.
The challenges in global shipping continue
The cost to send a container from Asia to the west coast of the USA is now 13 times higher than in 2019, reaching a record price of US$20,000 for one 40’ container, with the global average increase of 8 times higher when compared with pre pandemic era. Yet the increase in the cost of shipping is just one of the challenges facing the international moving industry.
Congestion at ports and delays in shipping
The surge in demand for shipping from the end of 2020 combined with the reduction in available labor has resulted in congestion at many ports across the globe with vessels queuing offshore pending unloading, as we progress through 2021 this situation continues. In the USA with the Thanksgiving holiday season (the peak buying season for consumers) approaching, many importers are moving early to ensure they have required stock to respond to increasing demand. The acceleration in Delta-variant COVID-19 outbreaks in several counties has further slowed global container turnaround rates, which when combined with severe weather outbreaks in Asia and The USA has further disrupted shipping timings with less than 40% of vessels globally meeting their published schedule in July.
Driver shortage is a global issue
Road transportation is a key function of international moving, be it moving effects within country or region or moving effects arriving by sea away from the port. The severe shortage of truck drivers in the USA is also being experienced globally. This shortage is making it difficult to source transport solutions, a high level of late notice cancellations and changes of schedule further exacerbating the difficulties of committing to dates for collection and delivery.
Key to moving goods is warehousing, enabling effects to be stored pending on transit and delivery. The growth of e-commerce is fueling the demand for warehousing space and fulfilment centers. With the uncertainty in shipping and with transportation driving the need for storage during a move, moving companies are facing ever increasing competition for available space.
What is the outlook?
There are signs that freight prices have steadied during August as shipping lines continue to seek solutions to meeting demand, including utilizing less congested ports and sourcing of additional containers, Hapag -Lloyd having bought an additional 450,000 containers in the last 12 months. Ports are seeking to increase capacity by accommodating new “mega” vessels and introducing larger cranes. However, with a number of countries still looking to contain Delta variant out breaks and continuing supply chain issues such as a global shortage of microchips causing the world’s largest car manufacturers to cut production by 40% every indication is that the challenges impacting Moving will continue into 2022.