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Issue 8 2020 - Freight Business Journal a n a l y s t


Drewry said the container


market was in a state of “dysfunction, bordering on chaos”. Supply chains had been stretched to near breaking point by the unprecedented volatility in demand swings, with port congestion notices popping up at ports in all continents, including Felixstowe, but also Bilbao, Los Angeles and Sydney, to name a few. While the container


shipping industry was to be commended for coping as well as it has with the unexpected demand surge, “the trade-off has been longer lead-times and massively inflated freight rates as everyone scrambles for the few available containers, which have become a precious commodity”, Drewry said. The problem as the analyst


saw it was not so much insufficient ships or containers, rather an inability to get them where they are needed in a timely fashion. It said: “Carriers having been throwing capacity back into the market but landside bottlenecks and long queues outside of ports all point to an infrastructure that cannot cope with sudden big peaks in activity.” Drewry senior manager for


container research, Simon Heaney, told FBJ: “The whole global supply chain is creaking – congestion notices are popping up all over the world.


The problem is not unique


to Felixstowe, “although the UK does appear to have been hit a bit worse than elsewhere”, he said. “It could be a combination of an upswing in demand and an additional rush to beat Brexit” Heaney confirmed that some


shipping lines were cutting their vessels’ UK allocation or in some cases skipping the UK altogether. However, the UK’s problems should be put into proportion, he said: “It is the biggest market in Europe for containers for China – slightly ahead of Germany.” Heaney said that it was


likely that the need to move boxes overland or by short-sea services from Continental hub ports would put pressure on those links too. Meanwhile, he added, “freight


rates are absolutely soaring. This system isn’t designed to cope with such wild upswings.” In fact, the current problems


were due not so much to shortages of ships – this had been corrected at an earlier stage of the crisis – but of boxes. “Containers haven’t been


circulating as quickly


as they should, although manufacturers are now pumping them out as fast as they can.” It would however be a while


before sufficient boxes had been produced to correct the imbalance – by which time, of course, the container shipping


industry’s traditional feast or famine cycle might well have moved to another stage. BIFA meanwhile said that its


members have faced multiple operational difficulties for months at the port of Felixstowe and increasingly at other ports such as London Gateway and Southampton and are incurring significant additional


costs. is It added:


“We understand that the port authority


responding to


the challenges and we hope that those responses are successful.” However, BIFA noted that


Felixstowe has said that the current high volumes will last at least into December and possibly the New Year “so we can only hope that the work they are doing to minimise the impact on daily operations and to maintain vital supply chains is effective”. The UK Major Ports Group


said that a survey showed that its members were currently coping with the surge in containers although they were very busy. Some ports were seeing 20% more activity than they did last November but were redeploying resources and utilising extra capacity UKMPG added that the peak


of containers was likely to have passed. Backlogs are reducing, including stocks of PPE which have halved in some locations and empty containers awaiting return.


///NEWS


The European Shippers Council (ESC) and European forwarders organisation CLECAT have urged carriers to respect contractual obligations and ensure a regular flow of cargo and containers during the current crisis. ESC president Denis


Choumert said that “shipping lines have been taking advantage of the capacity crunch to increase revenues much


beyond their costs…


Carriers have been passing on tremendous hikes in spot rates, imposing heavy surcharges above the fixed- term contractual rates.” Clecat president Willem


van der Schalk added that the costs for the freight forwarding industry were huge, from


the re-booking


ranging of


shipments to sometimes even losing customers.” European shippers and


forwarders call on liner carriers to put an end to the present situation and to respect contractual agreements. They


added privileges enjoyed under the Consortia Block


Exemption Regulation, renewed in April this year, were now excessive as they allow carriers to use tools to manipulate the market. They are also “perplexed” that the European Commission has not responded in any way to the current crisis whereas the US Federal Maritime Commission has stepped up its scrutiny of liner activity. In the UK, the British


International Freight Association (BIFA) has joined FIATA (The International Federation of Freight Forwarders Associations) in calling on governments to investigate unreasonable surcharges in ocean freight. It said that its members are being inundated with additional


fees even though they have no control over service delays and port congestion. BIFA director general,


Robert Keen said that freight forwarders and shippers were “reeling from unjust demurrage fees linked to congestion in ports around the world”. They should not be penalised


by demurrage and detention practices when they cannot retrieve containers from, or return containers to, marine terminals. He cited a US


Federal


Maritime Commission (FMC) ruling in May which concluded that


there had been a long


history of unjust and unfair demurrage and detention practices, not just in the US, but globally.


News Roundup


that the by lines


DFDS is to start a new freight ferry route between Rosslare, Ireland and its northern French hub in Dunkerque from 2 January. The route will be serviced by three ferries, each with a capacity for up to 125 lorries and their drivers in Covid-19-safe single cabins. There will be six weekly departures from each port, either in the aſternoon or evening, with a crossing time of 24 hours.


CLdN is to add a second weekly call on its Cork to Zeebrugge ro con service, introduced in May. The move was welcomed by Port of Cork, which said that the second call will offer a quicker turnaround, as well as bypassing the UK land bridge.


Short-sea line Unifeeder is to add a Tilbury call to its weekly Rotterdam/ Lisbon/Leixoes service. Departures from Lisbon are on Wednesday, arriving in Tilbury the following Monday.


Ocean Network Express (ONE) is to launch a dedicated weekly Europe - West Africa Service from February 2021. It will call in Hamburg, Rotterdam, Antwerp, Le Havre, Algeciras, Tangier, Dakar, Tema and Abidjan.


OOCL is to expand its North Europe-Turkey (NET) service to five post- Panamax vessels from January next year. Launched in 2017, NET serves Piraeus, Gebze, Istanbul, Gemlik and Aliaga in the Eastern Med and Felixstowe in the UK.


Hamburg Port Authority and Tanger Med Port Authority have signed a letter of intent to form a partnership. Both authorities will exchange experiences and good practice in fields including efficiency of port and vessel operations, digitalization and port community systems, traffic management, security, IT and innovation.


Brittany Ferries chief executive Christophe Mathieu is to be the new chair of industry trade association, Interferry. He succeeds John Steen- Mikkelsen, former chief executive of Denmark’s Danske Faerger.


Sea


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