MI Supply Chain: Supply and Logistics Challenges

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Container shortages in Asia and congestion at UK ports have become new challenges for suppliers as the world plays catch up on the back of the economic disruption posed by the Coronavirus pandemic…

Global shipping schedules were initially disrupted during the early stages of the pandemic, but recently a surge in demand for imports and a backlog of empty shipping containers are causing bottlenecks at UK ports.

Alex Veitch, boss of trade group Logistics UK, blamed the disruption on “the three C’s”.

“It’s the Christmas rush, coronavirus, which is still causing supply chain disruption, and now customs – or the uncertainty around it, with businesses taking the decision to move goods in and out of the UK in case there is a no-deal Brexit,” he told the BBC.

What’s happening in Asia? 

The issues with container equipment are now overshadowing the problems with space, meaning obtaining bookings at the moment is an extremely difficult and costly exercise, as rates head rapidly towards USD10,000 and above (per 40ft container).

Some carriers have suspended taking bookings altogether until mid to late January, not just to the UK but to the whole of Europe, and further blanked sailings have been announced.

Southern China is the worst affected area right now, where there is little or NO equipment available and feeder services to and from the Port of Yantian will be suspended next month until the end of February.

What’s happening at UK Ports? 

A spike in imports due to the COVID-19 pandemic and fears of a no-deal Brexit have led to bottlenecks at UK ports.

The Port of Felixstowe has been suffering congestion for weeks, but the issue has now spread to Southampton’s port.

The problem is being exacerbated by disruption to shipping movements around the world, partly caused by the pandemic.

The leaders of organisations such as the UK Major Ports Group and the UK Chamber of Shipping and Logistics UK have written a letter to Transport Secretary Grant Shapps urging the Government to help clear congestion at ports.

The Department for Transport have said that partners across the Government are working closely with the freight industry to resolve challenges in the global container system.

What is our advice to MIA members and the MI industry? 

Suppliers: Think ahead about container requirements and make decisions fast as often rates are gone within hours. Follow specialist news outlets for updates on logistics and supply chain issues such as Westbound (www.westboundglobal.com/news-and-social-media.php) , British International Freight Association (www.bifa.org/news), or your chosen supply chain partner.

Retailers: Ensure you are working with wholesalers and manufacturers to secure stock needs now and organise EU to UK stock to arrive well before the end of the year. Sourcing of products could be challenging especially post 1st January 2021, so consider unexpected interruptions to cashflow throughout Q1.