Posted on 4th November 2021 in the categories: Logistics

No let-up in Sight for The Global Shipping Disruption

Container ship entering port amid the global shipping disruption

The global shipping turmoil has pumped freight costs to record highs, with no let-up in sight. The head of Braemar Shipping Services warns that it could be 2023 before the situation is fully resolved.

What’s causing supply chain issues?

Global supply chains have suffered nearly two years of strain, where shipping routes have been snarled by the pandemic, extreme weather, and one notable canal blockage

Global supply chains are still recovering from the impact caused by lockdowns imposed in 2020 to contain COVID-19. Initially, lockdowns in China shuttered factories, which stalled much of the supply side in global shipping. Then lockdowns across the globe prompted a surge in demand, as people ordered electronics to facilitate working from home.

The queue in the Channel

Delays are forcing vessels to anchor in clusters in the English Channel and North Sea. Some vessels are waiting up to a week to enter some ports. In turn, this will have a knock-on effect for supplies of consumer goods and manufacturing components in the coming weeks and months. A UK minister has warned over ‘major concerns’ about shortages in the run up to Christmas.

Getting worse before it gets better

The chief executive of Braemar Shipping Services, James Gundy, warned that container blockages around the world were only part of the problem and only going to get worse in the lead-up to Christmas.

It’s important to note that there are crew problems with ships, COVID cases and docks get quarantined. Therefore, the supply chain is getting knocked all the way through and thus industry experts “can’t see a real let up for another 18 months probably.”

Factors adding to the disruption

The crisis is a consequence of demand exceeding supply as economies continue to reopen and restock after more than a year-and-a-half of coronavirus pandemic disruption.

The HGV driver shortage, particularly severe in the UK in the aftermath of Brexit, has been blamed for adding to the distribution troubles as containers have stacked up with recent delays of up to 10 days in completing deliveries from Felixstowe.

Shipping experts have noted the shortage of vessels to carry containers has also contributed to record shipping prices. Moreover, these costs are set to be passed on through the supply chain.

Goudsmit UK

In response, Goudsmit UK are continuing to advise all customers at the point of quotation and order confirmation of the extended lead times so that they can be factored in when planning. We would request that you review your current requirements and advise of any issues asap. Furthermore, we would urge you to review your requirements for 2022 at the earliest opportunity.

Whilst freight delays are unavoidable at this time, we work with our customers by holding UK stock. We would encourage that 6-8mths of buffer stock is considered when re-ordering new production. This helps to reduce the impact of potential freight delays and lessening the potential requirement of costly airfreight.

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