Container Issues continue to escalate at UK ports

Container Issues continue to escalate at UK ports

LOFA reported two weeks ago of the congestion that is causing major problems at UK ports, this crisis is now escalating, and the situation is now being highlighted by the BBC who are reporting on the struggle and financial impact this it's having on UK businesses.


These issues at ports have led to shipping firms quadrupling their freight costs.  These delays, which mainly seem to be worse at Felixstowe, are being caused by a surge in import traffic.  


The owner of the port said that if the chaos continues, these increased shipping prices will have to be passed down the supply chain. It seems that containers are being left on the quayside because haulage companies are unable to book slots to enter the site. 


Retail outlets will suffer because they will be unable to sell what is en-route at the moment in time for Christmas which will mean there will be a knock-on effect for the outdoor leisure industry after the holidays when garden-related products start arriving ready for the S/S Season 2021. 


Hutchinson Ports UK who owns Felixstowe has said that Covid, the imbalance in UK Trade, and Brexit stockpiling have exacerbated the situation and they are working with their customers and stakeholders to try and find a solution for the current situation. 


Another problem that is facing the port is empty containers waiting to be shipped back to Asia, these are causing a backlog at ports across Europe and North America, and to add further fuel to the fire shipping companies have sharply increased freight prices in response to the congestion, some by as much as 300%.  


It is extremely worrying that big shipping lines are drastically reducing UK volumes because so much of the UK goods arrive through our ports.  Ports across the world are battling to manage these surging demands for imports but it seems that Felixstowe is struggling more than most.

Severe Disruption at UKs Three Main Container Ports


 

Congestion is causing severe disruptions at the UK's three main container ports. LOFA members are seeing shipping lines not being allowed to return empty containers to the ports because they have exceeded their agreed allocations. Consequently, ports are putting a block on them returning any further containers in an attempt to prevent congestion at the terminals.  In the past shipping, lines have used surrounding off quay container yards for overspill storage but this again is an issue because container yards do not operate the same hours as the ports.

 

Major congestion disruptions and misery at all three ports, Felixstowe, Southampton, and London are being further compounded by the added introduction of COVID 19 measures.

 

Right now, the situation is worsening, this crisis is expected to continue into next year, or until there is a let-up in the current volume levels, which is leading to carrier companies introducing port congestion surcharges.

 

This lack of space and container issues will result in price hikes coming in as early as next week.  This crisis has led to many carriers refusing bookings to the UK and even talks of UK ports being omitted on some vessel rotations. The container capacity issues in the market will inevitably lead to substantial increases in sea freight costs, and the lack of availability will also lead to delays in the delivery of containers to UK destinations. 

 

The situation will become worse before it gets better for logistic providers and UK importers.  It is hoped that the current backlog does not continue into Chinese New Year so that business can recover by the time we reach February 2021 and if not by the time we are all faced with the challenges that Brexit will bring.

 

This is troubling news for LOFA members and the industry as a whole, leisure products start to hit ports as early as December.  The UK appears to be in a particularly difficult position, the congestion and delays which appeared to impact Felixstowe initially have now spread to other ports, resulting in some vessels having to “cut and run’ before discharging containers.  The UK port issues have now led to one or two carriers unofficially communicating their refusal to take bookings to the UK from Asian locations during November. It will therefore follow that their vessels will not be calling at UK ports. 


Of course, the peak season, which has been heightened by six months of global trade being pushed into four this year, cannot be expected to continue indefinitely and is usually driven by Black Friday and Christmas sales. So, at some time, in the not too distant future, there must be some much-needed respite for UK ports and business, that said, with COVID-19 starting to peak once more, the current national lockdown and Brexit on the horizon, the next few months are still likely to be an extremely challenging time for the industry as a whole.





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