News / Supply chain confusion and sky-high rates ring in the new year for shippers

© Misirliahmet

The new year has not got off to a good start for European importers, who face significant delays and confusion on the arrival of their containers from Asia, coupled with a huge spike in freight costs.

On day 19 of the Red Sea crisis, confidence in the ability of the US-led Operation Prosperity Guardian naval protection force to guarantee safe passage to and from the Suez Canal has suffered a setback, following further missile attacks on vessels by Yemen-based Houthi rebels.

Operators of vessels within an alliance will take the final decision to transit the Red Sea, or re-route their ships around the Cape of Good Hope or, in some cases, pause the voyage pending further risk assessment.

It follows that alliance vessel-sharing agreement partners will have little or no control over the routing of a voyage, notwithstanding that the individual co-loading carrier may have decided to send all of its ships around the Cape or via Suez.

Indeed, Lars Jensen, CEO of Vespucci Maritime, is advising shippers: “If you book with a specific carrier and have a preference for a specific routing, you need to look into who is operating the vessel on that specific sailing.”

Meanwhile, there is much confusion over the revised ETAs in Europe of vessels already enroute from Asia, with some shippers complaining of “discrepancies” in rotations and arrival times between alliance members loading on the same ship.

In fact, a UK port agency contact told The Loadstar that since Christmas, he’d seen five different ETAs for one particular ship.

“And I don’t think they are finished yet,” he added, “when it eventually gets to North Europe there are bound to be rotation changes and import discharges consolidated in order to get the ship back to Asia as fast as possible.”

This could cause more headaches for importers who, in turn, are struggling to keep their customers, retailers or site project managers, abreast of the latest changes to the arrival of their goods.

Speaking to the BBC’s Wake Up to Money programme this morning, Rachel Waring, MD of Norfolk-based Warings Furniture, which supplies the hospitality industry, said the company was “not usually a just-in-time stockist, but had ended up this way over this season, sadly.

“One client is going to be very disappointed with the long delay in their goods arriving,” she added. “We were due to have a container land the week before Christmas, and the client would have been receiving their first delivery today, but there is now at least a three or four week delay.”

And freight costs are also skyrocketing, said Ms Waring, who advised that just within the past week rates on the route had already shot up to $3,000 per 40ft, from a low of $900, and she feared they could go higher.

“The problem is that we have to bake-in these costs when we are setting prices for the year ahead with our clients and, unfortunately, this is going to have an impact on prices and, obviously, that’s not great for inflation figures.” she said.