The British Association of Removers (BAR) has released its update for October on the global shipping scenario. The report presents useful insights into the current complexities and challenges of the shipping industry.
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Global Shipping Conditions – 1st November 2023
STATE OF THE MARKET:
Freight rates remain stable, the near constant reductions that took place during the summer appear to be at an end. However, the operational changes that shipping lines have implemented to combat these falling rates do now seem to be having an effect.
The most noticeable issue to someone moving, will be the possibility of the increased notice required to secure space on a vessel. Some shipping lines have already advised the need to give 4-
6 weeks’ notice when booking to Jebel Ali (Dubai) and the wider Middle Eastern region. It is likely that other ports/trades will follow suit, and while BAR members are generally covered by allocation agreements with the shipping lines, some of the more popular destinations may become an issue.
Additionally, the likelihood of a container being rolled, left off its intended vessel and moved to a later vessel is increasing as shipping lines manage their volumes, if this happens it is totally outside of the movers control.
It’s suggested that customers are transparent and plan moving dates in advance with their chosen mover, to allow sufficient time to book appropriate vessels to move customers’ belongings.
Shipping-lines continue to introduce measures to compensate for the falling freight rates, including cancelation of an entire vessel schedule forcing all bookings to a later vessel, dropping some
previously routine destination ports-of-call, and ‘slow-steaming’ to reduce vessel fuel consumption.
The result is slower than advertised voyage times, and arbitrary last-minute re-booking (of loaded) containers onto a later vessel.
We reiterate our previous message that moving companies and customers alike, should be prepared for uncertainty and slower overall transit times, even after a vessel has departed.
Shipping lines are notorious for their lack of compensation for delays. Imbalance of trade on some trade routes is still a problem because of the lack of import shipments arriving at European and UK ports. This imbalance is an additional challenge for the shipping-lines, causing a shortage of empty sea-containers readily available for re-loading and export. In some
cases, this will impact customers’ preferred moving date. As reported last time, freight-rates on some trades have fallen so far that the shipping lines
countermeasures of reduced vessels and slow steaming are even encouraging freight rates on those lanes to rise. Despite this, BAR movers continue to benefit from negotiated annual freight contracts which smooths the impact and contributes some degree of stability. We expect this uncertainty will gradually settle and stability will return slowly over the coming months.
Ultimately, severe service challenges, short-notice changes to container bookings, and variable freight rates, despite downward trends, will be reflected in your BAR mover’s inter-continental
door-to-door quotation and terms.
Generally, acceptance of container bookings for export shipments from the UK has vastly improved in recent months. This drop-in demand is translating into successful bookings on preferred vessel sailing dates. Eastbound trades from Europe (shipments to Asia, Oceania, India, and Middle East). Acceptance of bookings is currently average, we are starting to see increased notice required to the Middle East, and this will likely extend to the other Eastbound trades. These trades are also the most likely to be impacted by cancelled sailings, and slow steaming. Customers should be aware that sea container shipments may take longer than expected to arrive through no fault of the BAR Mover.
Westbound trades from Europe (USA, Canada, Caribbean, and Latin America): Acceptance of bookings is currently good and ships ‘waiting time’ for unloading at most USA ports continues to
improve. High demand for container space aboard vessels on these trade routes during the peak season summer months may cause a shortage of empty containers. Destination ports in the Pacific Northwest, such as Seattle, Portland, and Vancouver, are still not being served on a direct ‘all water basis’, with alternative routes offered via ports on the US East Coast. However, expect delays because of intermittent congestion on the US rail networks which carry the containers from East to West Coast.
Southbound trades from Europe (South, East, and West Africa): no change. Where a shipping line does offer a service on a given route to this area, it is usually quite reliable. However, many
hinterland destinations (usually served via main ports with overland on-carriage to inland freight terminals) have been removed from the Shipping Line schedules because of lengthy main port
congestion and or poor on-carrying transport infrastructure. This has caused a reduction of the main destination ports of call coverage across much of this region, especially the Indian Ocean
The recent container road-haulage challenges due to a lack of drivers experienced across the UK has much improved in response to easing demand, with the majority of shipping lines withdrawing their Driver Retention surcharge (DRS). During the prior driver shortage, most moves were transhipped from van to sea-container, via loading at the movers warehouse, which safeguarded against substantial additional costs associated with a container no show at the customers residence. Whilst the preference is to direct load containers at customer residence whenever possible, it must be noted that most container-hauliers prefer the certainty of collecting from the movers warehouse. This is particularly the case in and around busy cities with difficult parking, poor access to residence and increasing prevalence of Low Emission Zone surcharges. So, customers are cautioned that direct residence loading is prone to container no-shows, whereas loading via the mover’s warehouse offers much greater certainty.
CURRENCY EXCHANGE DIFFERENCES
Shipping Line’s container-freight rates and ancillary charges are usually quoted by them in foreign currency, mainly US Dollars and Euros for sea-freight, and local destination currency for destination port and on-carriage charges. These ‘freight charges’ are, however, payable in British Pounds (GBP) and converted typically at time of the ships’ sailing date, applying the currency exchange rate at that point in time. BAR Movers generally will include these container-freight costs in their GBP quotation offered to the customer using the indicative exchange rate(s) valid at the time of their quotation. Customers should therefore expect an adjustment of the Mover’s final invoice versus quotation, reflecting the actual exchange rate applied by the Shipping Line at time of despatch. A BAR Mover has no control over the actual exchange rate used and applied by the Shipping Line.
FUEL COST CHANGES
Sea container freight contracts are subject to periodical ships fuel (bunkering) cost reviews. This is a mechanism applied by Shipping Lines which compares the average price of bunkering quarter-on quarter and then adjusts the rate either up or down based on the change. With the well-publicised energy supply issues, bunkering increases adding to the overall sea-container freight cost are highly probable. We have seen increases as much as US Dollars 350 per container in recent examples.
Our UK Ports have experienced labour and Border Force strikes over the past 9 months; while no actions are currently scheduled that we are aware of, customers should be aware of the impact of potential future strike actions which invariably cause unexpected delays to both outbound (export) and inbound (import) shipments, particularly the inbound UK customs clearance time and
subsequent container deliveries.
The acceptance of ‘Li-ION’ batteries in household and personal effects shipments is a complicated subject. There is a widely reported increased fire risk associated with these batteries. Shipping
Lines themselves are so far inconsistent in standardising their rules for their inclusion or exclusion from a consignment. Typically, we experience that Shipping Lines will decide on a shipment by shipment basis whether Li-ION batteries can be included. This extends to all and any items which may require such power units, examples include but not limited to cordless power tools, laptops, e-scooters, e-bikes and similar.
BAR recommends that Li-ION batteries are NOT shipped. If however, you include them in your shipment, your moving company is likely required to declare the shipment as ‘Hazardous Cargo’.
This is not as simple as it sounds. Firstly, your mover must obtain the shipping line’s permission to include Li Ion Batteries as hazardous cargo (not all carriers accept). Next, you will incur a substantial freight surcharge, driving up your cost of shipping. The rules for including hazardous material in a shipment are fastidious; it will also impact the time is takes to secure a confirmed container space booking on a ship.
Failure to declare Li-ION batteries (or other hazardous goods) in a shipment, whether by intent or in error, is treated by the Shipping Line as a misdeclaration. This is a serious offence under maritime law and would lead to a substantial fine (payable by the customer) (currently circa 30,000 US Dollars); in addition, the Shipping Line could confiscate and dispose of the consignment.
We assure all customers that your BAR Overseas mover is highly experienced and will always use their best endeavours for an efficient and trouble-free overseas move. This update is intended to provide you with unbiased information on the state of shipping, and its many challenges.