Cargoes delayed by the Ever Given container ship grounding in the Suez Canal earlier this month are starting to arrive at ports around the world, leaving workers like Transport Driver Harris in Singapore to rush to catch up with the backlog .
Like blocking was eliminated and Egyptian port workers channeled hundreds of delayed ships by one of the busiest waterways in the world, Harris did “not have a lot of controls.” . . collect. ”But now“ we can see more orders coming in, ”he said, adding that his company had warned staff that there would be an increase in work in the weeks after the canal reopens.
Singapore is the most common destination for container ships stranded in the Suez queue – of nearly 100 delayed crate-carrying vessels, around 20% were destined for the Asian hub, according to project data from the Visibility Group of the supply chain 44.
But it is by no means the only port battling an increase in traffic – and it puts new pressure on global supply chains that were already struggling to cope with the challenges posed by the coronavirus pandemic.
Keith Svedsen, COO of APM Terminals, the world’s third largest container terminal operator, said the main impact of the Suez disruption has been felt in Europe this week, with “pressure points »In its Spanish and Nordic ports.
The terminals of the hub ports in Malaysia, Oman, Morocco and Spain operated in “emergency mode or at full capacity” to cope with sharp increases in volumes as ocean carriers dumped cargo for transport to other ports, he added.
The port of Antwerp in Belgium expects a surge in activity from this week that will persist until June, although it has said it could cope without major delays.
His rival in Rotterdam tells a similar story. “At the end of the day, we are continuing our efforts,” said Leon Williams of the Rotterdam Port Authority. “Ships should wait longer to unload their cargo, but it’s not a crisis.”
PSA, one of Singapore’s two main commercial port terminal operators, said the “first wave” of container ships from Suez had reached the island’s shores, adding that their cargo had been “processed in smoothness ”through“ detailed advance planning ”.
As European and Asian ports have grown stronger to cope with congestion, increased traffic has created contagion problems beyond the docks. Trucks and railways that bring goods to and from ports have become a bottleneck in ports such as Gothenburg in Sweden. “The whole system is geared towards a normal week,” Svedsen said.
UK importers have said goods held up in the Suez queue and initially due to arrive now will take up to 10 more weeks, in part due to limited places for trucks in warehouses.
Meanwhile, delivery times for eurozone suppliers are at their longest in 23 years according to the IHS Markit Purchasing Managers Index, a widely followed survey of business activity; as a result, input cost inflation in the euro area accelerated to its highest level in a decade.
The further disruption of global logistics networks already stretched by the pandemic has driven up costs for exporters and strained production lines.
Global Shipping fought with chaotic schedules for months on end due to fluctuations in consumer demand for goods, as well as plant closures and Covid containment measures that have slowed port operations. As a result, since last fall there has been a shortage of empty containers where they are needed.
In February, PSA in Singapore said it was “increasing its capacity and additional resources” due to “increased ship calls and container volumes”.
Shipping companies are desperate to get empty containers back to Asia from Europe as quickly as possible to avoid any other delay.
Some have resorted to purchasing new boxes. This month, Hapag-Lloyd invested $ 550 million to purchase 150,000 20-foot containers. Rolf Habben Jansen, chief executive of the German airline, said he expects a return to pre-pandemic service levels by the middle of the third quarter, aided by the easing of restrictions on Covid-19 in Europe.
“We see light at the end of the tunnel. We could have done without the Suez incident, ”he said. “The boxes will be tight over the next few weeks.”
The container shortage has pushed freight rates from Asia to Europe, which peaked in March and began to decline until the Suez blockade. The cost of a 40-foot container has since risen 7% to $ 7,807, according to booking platform Freightos – 450% more than a year earlier.
Alan Murphy, managing director of consulting firm Sea-Intelligence, said European exporters faces higher prices due to the rush to return containers to Asia, especially for low-value raw materials and goods such as scrap metal.
“If you are looking to export anything outside of Europe, you will be hard pressed to find containers and space without paying very high freight rates,” he said.
Higher prices are not the only challenge. Pawan Joshi, executive vice president of product management and strategy at E2open, whose platform manages 26% of global shipping bookings, said component shortages in supply chains threatened ripple effects.
Citing the example of the computer chip cracking which recently forced some automakers to cut production, he said earthmoving machines, generators and air conditioners were among production lines at risk of similar disruptions.
“The silent, long-term disruption comes from making other products,” he said. “If you put that [against] the backdrop to the semiconductor crisis, so we would expect to see that – not immediately because there are stocks [at the moment], but in the coming weeks.
Additional reporting by Valentina Romei