Barenbrug Export Operations Update - Dec 2021

By Terje Oll

 

Without a doubt, the most challenging part of the supply chain is the current shipping climate. The international shipping industry has never seen such strain as we have been facing for 2 years now.

 

Throughout 2020 & 2021 we have and continue to face many difficult challenges.  Equipment shortages, reduced space on vessels, port congestion, vessel delays and continued high rates are the main challenges in the current global sea freight shipping and are largely driven by high demand for import containers from China as well as the pandemic.

 

Some of the challenges we currently and will continue to face are:

 

  • Border closures and lockdownsAs domestic border closures/restrictions happen in a very short notice, it has a significant effect on delivering goods to and from the port. This has added more pressure to the Transport industry that is already under immense stress. This has also led to truck driver shortage. Snap international border closures such as major ports in China and India cause significant disruptions throughout the supply chain.  
  • Severe congestion in transshipments ports / port omissions and schedule recovery: The major transshipment hubs of Singapore, Port Kelang, Columbo etc. are heavily congested and shipping lines are omitting ports of call along scheduled routes, discharging containers at alternate ports, or simply changing routings completely without notice. Shipping lines have suspended the services to US (Seattle/Tacoma) due to heavy traffic and vessel backlog. At one point 200+ vessels were in the queue and some vessels were force to drift off coast. All major shipping lines have suspended their service to Middle East until further notice (probably till mid 2022).
  • Industrial actions around the country: Patrick’s Terminal Port strikes, where work was stopped for 12 hours, 3 time s a week – this added further stress to the shipping crisis and caused further delays.
  • Global port congestion: This global port congestion is leading to schedule reliability being at an all-time low.
  • Schedule changes and uncertainty : It is extremely difficult to plan ahead due to unannounced schedule changes, omission of ports and suspension of services into certain regions with very little or no notice at all. This also makes it challenging to meet customer requirements.
  • Equipment shortage: Due to equipment shortage in China, few shipping lines have sent “sweeper vessels” to Australia to collect empty equipment (approx. 1,600 empty TEU’s per vessel)  as a container evacuation plan. Specific purpose of this is to collect empty equipment from Australia and deliver them to demand locations in Asia. This is causing severe equipment shortage here in Australia.
  • Vessels are overbooked: Due to supply and demand imbalance, vessels are fully booked or over booked 2-3 months in advance. Current situation is: shipping booking window is 60-65 days, rates are valid for 30 days and vessels are over booked up to 90 days. It cripples our ability to plan ahead. Few shipping lines have already announced their service to EU is fully booked till mid-March 2022.
  • Increasing freight rateDue to demand, lack of capacity, rotation charges and additional costs incurred with vessels delays, ocean freight rates are increased by 4-10 x. Shipping lines are able to provide spot rates or monthly rates only.  
  • Political issues: Riots in South Africa and world blockage of Sudan. Due to political issues shipping lines suspend services until further notice. Since then South Africa has been reopened but Port Sudan remains closed. 
  • COVID-19 quarantining for entire vessels!
  • Airport closures and air freight rates/availability: Due to border closures all cargo planes were grounded which led freight forwarders to use commercial aircrafts to move cargo. This is extremely expensive!

 

Each day is bringing on new challenges and at times it’s a struggle to keep up with all the changes. Our only solace is, every single industry is in the same situation.

 

Considering, we are facing the above challenges daily, Barenbrug Australia is very proud to say with close collaboration with warehouses, transport companies, shipping lines and our clients we have achieved the impossible and delivered our product to 40 different countries. We work very hard to meet all our client requirements as best as we can and continue to do so.

 

Going forward we are ready to take on each challenge as they come and continue to provide best logistic solutions to our Sales team and to our customers.

 

For any queries regarding shipping please contact:

Terje Oll (International Export Operations Team Leader): toll@barenbrug.com.au 

Theresa Wong (Export Shipping Officer):  twong@barenbrug.com.au

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