Red Sea crisis still causing major shipping disruptions
The ripple effect of the Red Sea crisis still runs strong, causing severe congestion in ports, including Singapore. Initially thought to cause temporary delays, it led to severe congestion, and created longterm issues like higher shipping rates and low schedule reliability. Recent Xeneta data shows some easing in ocean-shipping volatility, with a narrowing spread between high and low rates. This spread increases during high volatility as shippers, freight forwarders, and carriers react quickly to supply chain uncertainties. Concerns are rising about expanded Houthi strikes on Red Sea commercial shipping after recent attacks. The combined costs of crew bonuses, war-risk insurance, and Suez transit fees have made the longer route around Africa more economical for many shipping companies. Insurance premiums for Red Sea transits have risen significantly since December.
Two box ships were attacked at the end of July according to the UK Maritime Trade Organisation, including 2,000 teu CMA CGM-operated Lobivia, part of the India Gulf Red Sea Express service. The ship has resumed its planned voyage and is expected to reach its destination safely. Stay ahead of these challenges with our expert freight forwarding services.
Contact us today to explore alternative routes, mitigate risks, and ensure your cargo reaches its destination efficiently. Let us help you navigate the complexities of global shipping during these turbulent times.
Ocean Import Updates
Global IT outage highlights supply chain vulnerabilities
The global IT outage on 19th July caused by a faulty update to Microsoft cyber-security software from Crowdstrike severely disrupting air cargo services. According to Xeneta, it may take days or weeks to fully resolve the delays.
Thousands of flights were grounded or delayed across major air freight hubs in Europe, Asia, and North America, leaving planes and cargo out of place, potentially causing extended delays.
Seaport operations were less affected, with minimal disruption to rail and ocean transport. Air freight is more immediately impacted by IT failures due to frequent flights, unlike containerships that spend weeks at sea. With airfreight capacity already limited and global demand up 13% in June compared to last year, airlines will struggle to catch up. Despite a spokesperson from Heathrow Airport stating operations quickly returned to normal, the impact on air freight remains significant.
Our team is equipped to provide tailored solutions for the evolving changes within the logistics industry. Contact us today to explore alternative shipping solutions, mitigate delays, and keep your supply chain moving smoothly. Let our expertise in freight forwarding help you navigate these challenging times efficiently.
Container freight rates show signs of peaking
Container spot freight rates are showing signs of stabilising, with recent indexes indicating smaller gains and some declines on major east-west routes. To see LCL sailing schedules, click here.
The FBX showed declines on other routes as well, with Asia-North Europe down 2% to $8,474.5 per 40ft and Asia-Mediterranean rates dropping 3% to $7,524 per 40ft. However, there were increases on some routes: WCI’s Shanghai-Rotterdam rates grew 3% to $8,267 per 40ft, and the XSI Asia-Europe component rose 5% to $8,461 per 40ft.
Despite some increases, the overall trend shows single digit rises, suggesting that space is becoming more available. Linerlytica reported lower vessel utilisation, with the Mayview Maersk departing Tanjung Pelepas at 80% capacity, down from an average of 95%, and the HMM Garam leaving Singapore at 90% capacity. However, rates are expected to remain high throughout the peak season, despite the recent signs of stabilisation. To see our current freight rates, click here.
Bangladeshi garment makers turn to costly airfreight amid curfews
Recent curfews and internet blackouts from student protests have massively impacted transport, leaving 3,000 tonnes of air cargo grounded. Bangladeshi garment makers are resorting to expensive airfreight due to curfews disrupting ocean transport, with buyers reluctant to cover the extra costs. Even those willing to use airfreight demand price cuts of 15-20%.
Chittagong port is congested with nearly 40,000 TEU of containers due to the disruptions, causing high demurrage charges for importers. Businesses are urging the government to waive these charges to mitigate financial losses. Port operations are struggling, with only 3,500 TEU of containers being processed daily, as 80% of yard space is occupied. Our team is equipped to provide tailored solutions for the evolving changes within the logistics industry.
Maersk Frankfurt heads to open sea after fire
The Maersk Frankfurt, a new containership, is heading away from India under coastguard escort after a fire, which was initially caused by a possible electrical fault, was mostly extinguished. The vessel, carrying dangerous goods like benzene and sodium cyanide, is still dealing with smouldering containers. Currently, it is about 45km west of Kundapura, India, accompanied by pollution control and coastguard vessels.
The ship’s owner has declared General Average, which means shippers will need to settle claims before their cargo is released once the vessel reaches a safe location. This process might take months or years and could be complicated by the high salvage costs.
Pathway
Our latest development designed to enhance product tracking
Key features:
Enhanced Product Tracking:
New Orders Tab: Featuring all relevant shipment columns and CO2 emissions data, calculated by shipped weight against the order header, line, and SKU.
Drill-Through Capabilities: Order items, providing detailed visibility at the item line level, ensuring clients can track their products more precisely.
Order Status Updates: View updates on order statuses, including estimated and actual dates, on-time KPIs, and supplier performance metrics.
Predictive Reliability Indicator: Forecast the likelihood of on-time arrival by evaluating all upstream milestones and downstream schedule
Improved Road Freight Tracking:
New Milestones: We've added a ‘Border Crossed’ event obtained through CDS messaging, enhancing the tracking of road freight shipments.
Enhanced Map View: The updated road tracking now includes new milestones and an improved map view for better visibility of shipment status.
CO2 Emissions Calculation: Road freight CO2 emissions are now calculated for all applicable shipments, following an enhanced job creation process that includes pickup and delivery data and highlights specific border crossings.
Virgin Atlantic ends Shanghai route due to rising costs
Virgin Atlantic Cargo will cease its Shanghai route on 26th October, ending a service it has offered since 1999. The decision follows rising costs and operational challenges, including longer flight times due to the need to avoid Russian airspace, which has made the route less viable. Despite strong cargo volumes, the additional expenses and complexities could not be justified. Virgin Atlantic's spokesperson confirmed that, while the route was popular, overall performance and cost-efficiency are critical for their network decisions.
Customs Compliance
Returned Goods Relief: Are you paying duty?
Temporary Importation Relief (TIR) allows for the temporary import of goods without full duties or VAT if they are reexported within a specified period. This is particularly advantageous for goods involved in repairs or exhibitions, helping to save on associated costs.
Customs Warehousing provides a means to store goods duty-free until they are released for free circulation. Inward Processing Relief (IPR) suspends duties and VAT on imported goods while they undergo processing or repair, with the goods then reexported, thus reducing the costs related to these operations.
Lastly, Returned Goods Relief (RGR) offers relief from import duties and VAT for goods returned to the UK or EU within a certain timeframe, preventing the need to pay these charges again on items coming back into the country.
How can we help?
Expert Advice: We provide guidance on the best reliefs and exemptions for your needs.
Application Support: We manage the application process for various reliefs.
Documentation: We ensure all customs paperwork is completed correctly.
Compliance: We help you stay compliant with customs regulations.
The UK faces a severe driver shortage, with about 15% fewer HGV drivers than two years ago. Brexit and low job appeal have reduced the influx of foreign drivers and deterred British workers. This scarcity is driving up salaries and operational costs for hauliers. As demand surges, retaining subcontractors has become harder, pushing hauliers to increase rates.
For clients shipping Solar Products and Battery Energy Storage Systems (BESS), the driver shortage and subsequent haulage rate increases in the UK could implicate higher shipping costs and potential delays.
One of the wettest summers delays UK solar projects
The UK is experiencing its wettest summer on record, with unprecedented rainfall causing significant delays to solar energy projects across the country. Heavy and persistent rain has hampered construction schedules, impacting both the installation of solar panels and the broader deployment of Battery Energy Storage Systems (BESS).
For clients involved in solar energy projects, the combination of adverse weather and ongoing logistical challenges underscores the need for flexible project planning and contingency measures to mitigate the impact of these delays.
Labour’s ambitious energy and climate goals
Labour’s new government has set ambitious targets, including achieving 100% clean electricity by 2030, launching a Great British Energy company, upgrading five million homes, and reforming the energy system. However, these goals face challenges such as high costs, regulatory complexities, and significant infrastructure needs. Achieving them will require overcoming these hurdles effectively.
No two logistics challenges are the same.
We understand this and tailor our solutions to meet your specific needs. Our teams work closely with you to develop strategies that address your unique challenges effectively and efficiently. Our expertise allows us to provide tailored solutions that address the complexities of the market. As shipping companies show signs of flexibility in contract allocation coverage and equipment release, our team can navigate these changes effectively, ensuring smooth operations for our clients. Our strategic approach includes offering guidance that allows businesses to plan and adjust their logistics strategies accordingly. Click below to speak with our team.
As a business involved in international trade, you may encounter situations where goods that were originally exported from the European Union (EU) or Ireland need to be returned. This is where Returned Goods Relief (RGR) comes into play.
Currently, long-term rates are below spot rates, prompting carriers to limit their capacity for long-term agreements and use peak season surcharges. Almost all vessels are running at full capacity, driving the surge in rates. Keep reading.
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