This monthly update, provided by the British Association of Removers gives a current overview of the global shipping market out of the UK. It provides HR and Global Mobility Managers with a useful and unbiased understanding of the potential challenges, cost implications and risks that may need to be planned for.
**Please note this information applies to all UK international removers and is not unique to Bournes.**
Key UPdates:
Suez Canal Diversion
- The diversion around the Cape of Good Hope due to conflict in the Red Sea region continues to run well.
- Longer transit times are now the norm and we still do not have an estimate as to when passage through the Suez Canal will be safe again.
- A reduced number of shipping lines are calling at Middle Eastern ports on route to Asia because of this diversion. This is beginning to severely impact the region as those that do call Middle East ports are in high demand and there is a backlog of shipments.
- Some BAR members are also seeing some congestion in Asian transhipment ports for shipments to Oceania, causing associated delays.
- Shipping lines' attempts to manage their volumes is increasing the likelihood of schedule adjustments as containers are rolled to a later vessel.
- Increasing freight costs for shipments from Asia is also having an effect on other routes with capacity reallocation impacting exports from Europe, particularly to North and South America.
- This is still a very fluid situation with shipping lines reacting to developments as they unfold.
Container Imbalances
- The shortage of import shipments arriving at UK and European ports continues to create challenges for shipping lines. There is a lack of empty sea containers available for export, which may impact our ability to meet preferred moving dates. Unfortunately, this is beyond the control of the mover.
- Container imbalances can also sometimes affect the quality of the containers supplied by the shipping line. If a container provided is unsuitable for its intended purpose it will be rejected. Waiting for a replacement container can cause delays to the loading date but is important to protect the shippers belongings from damage.
Freight Rates
- As reported in the July update, freight rates on some traffic lanes have fallen so far that shipping lines countermeasures (such as slow steaming/reducing vessels) are encouraging freight rates on those lanes to rise.
- Despite this, members of the BAR Overseas Moving group (including Bournes) continue to benefit from negotiated freight contracts to minimise the impact and provide a degree of stability.
- The BAR expect the uncertainty to gradually settle in the coming months.
Russian Passport Holders
- Shipping line "ONE LINE" has recently confirmed that they will NOT transport consignments owned by Russian passport holders. The BAR are seeking clarification from other shipping lines on their stance.
- Russian passport holders must liaise with their moving company carefully when planning their relocation. Ensuring that the chosen shipping line can successfully clear their goods at the destination is essential to avoid potential disputes and significant storage charges.
Shipments Containing Fridges/Freezers
- The BAR has had some reports that they are experiencing issues with shipping lines when loading fridges/freezers. Several shipping lines have advised the BAR that these can be carried, with the caveat that the shipper is responsible for declaring them as hazardous if necessary.
- Your chosen moving company should advise if any items contained in your assignee's shipment require additional declarations.
Market Availability
Below is a quick summary of the key points to be aware of for routes departing Europe:
Eastbound trades from Europe (shipments to Asia, Oceania, India, and Middle East):
- An operational surcharge is likely to be applied due to Suez Canal diversions.
- Increased notice is required for bookings, although acceptance is generally good.
- Possible impact of cancelled sailings and slow steaming.
- Sea-container shipments may take longer than expected to arrive.
Westbound trades from Europe (USA, Canada, Caribbean, and Latin America):
- Acceptance of bookings is currently good.
- Ships' waiting time for unloading at most USA ports continues to improve.
- High demand for container space during peak season may cause a shortage of empty containers.
- Delays for Pacific Northwest are expected due to intermittent congestion on US rail networks (currently not being served on an 'all water' basis).
Southbound trades from Europe (South, East, and West Africa):
- Shipping lines offer reliable service on given routes.
- Reduction of main destination ports of call due to congestion and poor transport infrastructure in hinterland destinations.
- Indian Ocean Islands are particularly affected by the reduction in coverage.
Changes to Costs
- Exchange rate fluctuations and shipping line fuel (bunkering) cost reviews can impact the final sea container freight cost. In some recent bunkering examples some movers have seen increases up to US$350.
Lithium-Ion Batteries
- Shipping lines are still yet to agree on consistent rules regarding the acceptance of Li-ION batteries which have been widely reported to increase risk of fire (examples include e-bikes/scooters, cordless power tools, laptops etc).
- The BAR Overseas group recommends that removable Li-ION batteries are NOT SHIPPED and are instead removed and replaced at destination. If they are included the shipment may need to be declared as Hazardous cargo which will require additional documentation processes and substantial freight surcharges, if permission is granted.
- Failure to declare batteries whether intentionally or in error is a serious offence under maritime law and could lead to substantial fines for the customer (approx US$30,000) and risk of confiscation/disposal of consignment.
KEY ACTIONS to MiNIMISE RISK
The combined impact of the above challenges on relocating employees can be summarised as follows:
- Longer lead times and increased notice required to secure vessel space.
- Increased likelihood of delays due to containers being rolled or rejected.
- Freight rate volatility still exists but is expected to settle in the coming months.
Recommended Actions for Global Mobility:
- Highlight any Russian Passport holders to your shipping provider to avoid complications with shipping lines.
- Plan in advance wherever possible, communicating moving dates early to allow sufficient time for booking vessels.
- Communicate closely with your shipping vendors to stay updated on changes in schedules, routes and capacity for your key lanes.
- Ensure transparency by making sure you or your mover are discussing potential delays with relocating employees to manage expectations.
- Consider updating your policy to address the challenges with Li-ION batteries to prevent complications and additional costs (or at least ensure your mover is communicating this clearly with employees). Discuss with your mover how to handle any exceptions, such as batteries which cannot be removed.
These actions can help minimise risk of additional costs or a poor service experience for your employees.
If you require any further detail or have questions please don't hesitate to contact our Corporate Relocation Team.