Throughout the summer and fall of 2021, coverage on the fallout from the global shipping container shortage focused on the spectacle of cargo vessels lining up to enter crowded ports in the US and Asia. Now, the fourth quarter’s peak shipping season has brought those lengthy queues to European ports, and supply chains across the continent are feeling the strain.
The long waits outside of Hamburg, Antwerp, and Rotterdam are the result of the same forces as those holding up activities at Long Beach, CA in the US and Ningbo in China: ports are overburdened, and there’s a shortage of truck drivers. Without enough truckers to move cargo over land and stevedores to load containers back onto Asia-bound cargo liners, empty containers are piling up in ports and inland depots across Europe.
Brexit-induced headaches and soaring spot rates compound supply chain disruptions
The global container shortage, supply bottlenecks, labor shortages, and rising energy costs increase freight costs and delay shipping times across the European continent. Firms are feeling the crunch—and Brexit is only adding further fuel to that fire.
Red tape from new British customs regulations is complicating imports and exports for shippers. And the post-Brexit exodus of EU nationals coupled with new, more restrictive immigration laws is pushing Great Britain’s historic driver shortage to crisis levels. These events have cascaded into heavy congestion at UK ports and extended holdups in already strained trans-shipment points in continental Europe like Rotterdam and Antwerp.
In addition to these logistical hurdles, shippers are grappling with soaring container spot rates. In August, China to Europe spot rates were up 697 percent from the previous year, with the most significant spike in prices happening throughout the summer. However, prices seem set to level off — albeit at much higher levels than before the pandemic — after shipping giants, CMA CGM and Hapag-Lloyd announced caps on spot prices in mid-September.
Short-term shipping challenges and long-term opportunities
Shippers should ready themselves for an uncertain and volatile market in the months ahead, underscored by increasing costs and prolonged transit times. Container spot rates may have peaked, but the industry’s move towards decarbonization means that prices will inevitably get pushed further in the future. And the global container shortage shows no signs of abatement.
In the long term, innovation and out-of-the-box thinking will be essential to remain competitive and reimage how the industry operates. Adaptability coupled with savvy decision-making will ultimately determine how shipping firms successfully navigate the industry’s rapidly changing landscape and how they will adapt to a greener future.
For now, tradeoffs are inevitable. Manufacturers will have to look at their supply chains and find more efficient and cost-effective ways to get their goods to market and into customers’ hands. Producers may have to pay more for quicker transit times or sacrifice speed to reduce costs.
Efficient forecasting is essential to build costs and wait times into the supply chain and decision-making processes. CTSI-Global’s business intelligence tools can help firms make the right logistical decisions and streamline their supply chains. Contact us today and get the tools and support you need to transport your products more efficiently and cost-effectively.