metro tech

Metro’s new LCL guru

Jan 10, 2024 | , , , , , , , , , , ,

With over 20 years' experience in freight and logistics, the majority of which has been in the ocean freight environment and specifically the LCL product, in the UK and overseas, we are pleased to introduce our new Senior LCL Commercial Manager, Jane Kenny, who is leading this critical service area.

Our comprehensive LCL services provide predictability and reliability at a competitive price. Flexible solutions, which are integrated within our global sea freight network to provide fully-managed, adaptable, reliable and customisable solutions, that meet the demands of the most demanding supply chains.

Talking about 'LCL Shipping' or 'Groupage Shipping’, when we literally group your goods with other consignments, that need to take the same route, to make up full containers, Jane said. “Our focus within LCL is on offering cost savings and sustainable solutions, especially where customers are shipping under-utilised containers.”

“We are always thinking outside of the box to keep our customers’ freight moving and rates low and because we constantly have consolidated containers moving on the major trade-routes, we are able to offer sailing schedules which meet critical transit deadlines to keep supply chains moving efficiently.“

“LCL has always been a true passion of mine, as it is such an adaptable solution for moving freight, especially when the market is facing challenges and it is the perfect choice for shippers when rate inflation and lack of space threatens traditional shipping”. 

“Geographically Metro have a powerful presence on all the major trade-routes and are particularly strong in the United States and China, with really well supported LCL services out of critical cities like Shanghai, Yantian, Shenzhen and Hong Kong, which is so important when regular FCL traffic is facing massive rate increases and service disruption.”

Metro’s global LCL solutions:

 - Dedicated pricing team for fastest quote turnaround
- In-house Metro control from load point to arrival point
- Regular LCL services covering all major trade lanes
- Fastest ocean services utilised for our consolidated containers
- LCL containers packed/unpacked at our dedicated facilities for speed and security
- Facilities linked to customs CuDoS system and our in-house specialists

Metro’s LCL services are the most cost-effective method of moving freight over long distances, offering immense cost and emission savings on air, with an exceptional number of weekly import and export departures, and the fastest transit times.

LCL services depart from all major ports worldwide and can be linked to upstream and downstream warehousing, consolidation and distribution support. We handle global customs brokerage and declarations through our CuDoS system and you can track your shipments with our AI-powered ocean visibility tools.

EMAIL Jane Kenny, to discuss your ocean freight requirements, to learn more about our LCL product, or to request a quote.

LHR BA landing

Sea freight shippers opt for air and sea/air alternatives

Jan 10, 2024 | , , , , , , , , , , , ,

With the container shipping lines diverting around Africa until the Red Sea maritime security situation improves, the uncertainty and unpredictability that surrounds schedules could fuel demand for air cargo as shippers seek stability of services and certainty of transit times.

Air cargo demand data for last month showed a 9% year on year increase, with spot rates reaching their highest level in nine months and the dynamic load factor increasing by 3% to reach 59%.

The Red Sea ship diversions around the Cape of good Hope will inevitably cause ships to cluster at ports, leading to port congestion, worsening equipment shortages and gaps in sailing schedules, which may significantly impact global supply chains. 

Carriers will need to adjust schedules and networks, and would need to add more ships to achieve weekly or nearly weekly service frequency.

The diversion of ships away from the Suez Canal will swiftly see a million-plus containers delayed and when you factor in the knock-on effects of cash (in stock) tied up for longer, together with the fact that you don’t know how long this situation will continue means that some shippers will opt for the predictability of air cargo costing and reliability, to overcome the impact of the current sea freight disruption.

Improved stability in air cargo is encouraging a switch back to long-term, fixed-rate contracts, with deals for over six months rising to 45% of all contracts signed In the last quarter of 2023. Six-month contracts amounted to another 28% of the total market, while the share of up-to-one-month rates was just 14%.

This latest data appears to reflect stronger local market performance on key lanes and a global economy that is doing much better, but the market outlook forecast for 2024 remains modest, with an anticipated 1-2% growth in demand and a 2-4% rise in supply, though this does not take into account the potential ‘Red Sea’ effect.

Air cargo spot rates from Europe to the US were up +21% month over month in December, with the reduction in capacity helping to push up rates on this lane, while spot rates from China and Southeast Asia to Europe both rose 9% and strong eCommerce demand pushed the China to US air spot rate up 6% in December. Though these gains have subsequently fallen back, they may well recover if ocean shippers do start to look for time dependable alternatives, to hit supply chain deadlines.

Sea/Air; the effective and cost-efficient alternative

Sea/Air solutions offer an attractive blend of fast movement, defined transit times and significant economies over direct air freight.

The multimodal solution’s relative low-cost comes courtesy of a significant part of the cargo transit being undertaken by ship, from Asia, or the Indian subcontinent to Dubai, where cargo is transhipped securely and swiftly for the second transit leg, which is undertaken via air, directly to our UK hub airports, thereby completely avoiding the Red Sea problems and reducing transit times significantly.

Multimodal transport solutions like our Sea/Air solution are the best way for shippers to avoid delays between Asia and Europe and any potential land-side disruption.

Many of our customers are increasing the use of this solution, alongside their pure sea and air options, to avoid potential issues. We believe that Sea/Air should be considered to be a natural part of supply chain planning, due to the increased resilience and flexibility it offers over other modes and its lower carbon footprint compared to regular air freight.

For valuable, special and time-sensitive shipments we have a range of air freight and Sea/Air solutions, with extremely competitive rates and service combinations, to meet every deadline and budget requirement.

EMAIL Elliot Carlile, Operations Director, for insights, prices and advice.

Cape of Good Hope

The real impact of diverting ships round Africa

Jan 10, 2024 | , , , , , , , , , , , ,

Following the sharp escalation of attacks on container ships in the Bab-al-Mandeb strait off the coast of Yemen last week, major container shipping lines are diverting vessels around the southern tip of Africa, rendering the Suez routing unavailable for an unknown period.

With the Suez route closed it instantly delayed shipments to Europe and the US East Coast between 5-14 days, which effectively removes two weeks of supply of empty containers going back to the Far East.

While the impact of this action will be felt on multiple trades, its impact will be most profound on traffic from Asia and will be particularly troublesome on the Far East to North America East Coast (NAEC) trade, as there has been a shift towards the Suez routing due to the drought in the Panama Canal, making a reversal to the Panama routing impossible.

Routing around Africa by the Cape of Good Hope increases sailing times considerably, especially for services to the Mediterranean (MED). 

Using a standard speed of 17 knots during the deviation, we are looking at a likely increase in transit time of roughly 10 days on Far East-North Europe, 14 days to MED, and 5 days to NAEC. 

For a full roundtrip however, additional vessels will need to be injected into services on these trades to maintain a weekly departure.

Using the number of services on the impacted trades, the average vessel size on each service, and an additional vessel for every 7-day increase in sailing time, a switch to round-Africa would require 1.7 Million TEU of vessel capacity, which is around 6% of the total global container vessel capacity (just 4% is currently idled). 

Every week there is approximately 390,000 TEU loaded from Europe and USEC going to Far East as a mix off full and empties and having lost two weeks sailing round-Africa 780,000 TEU of containers less will arrive in Far East in time for the beginning of the Chinese New Year peak over the next 4 weeks, which will create shortages in key locations. 

The supply/demand crunch is therefore less a matter of ships and more a matter of equipment, which also means that all export trades out of Far East will feel this impact and not just those that usually go through Suez.

We are seeing some 20’ and 40’ GP issues currently ex North China Feeder Ports, but nothing major and issues can be avoided if shippers make their bookings in good time.

We remain hopeful that equipment issues might be worked through the system in the post-CNY lull period.

And that 6% assumes vessels using the Cape of Good Hope are running normally, but in the short term the required capacity injection is actually much larger, as some vessels’ total sailing time will be much longer, either because they  were either waiting around for days for instructions, or they were caught in the wrong locations for the diversion.

Part of the current overcapacity problem, caused in large part by new-build deliveries, has been absorbed by slow-steaming, and while this additional capacity could also be absorbed it would require vessels to sail a lot faster and claw back some of the lost transit days.

From a capacity perspective this should not be a disaster in the longer term and while equipment shortages in Asia have not happened yet , it may enter the equation beginning week 4 but from week 5 ish there will be far less export containers to be loaded from China 

During week 5 to 8 plenty of equipment will arrive back in time for re-opening factories, so any genuine equipment problem in East Asia will not transpire till early April 

We have formed a ‘Red Sea Crisis Task Force’ who are monitoring the ongoing situation, gathering intelligence, speaking with carriers and ensuring that we can share the latest information as the situation continues to develop. 

While many of the issues detailed will only be felt and experienced in the coming weeks, we are mindful to share this information now, to support your decision making and to help you prepare for any product movements that are essential.

If you have any questions or concerns about the impact of the Suez situation on your Asia supply chain, or would like to discuss its wider implications, please EMAIL our Chief Commercial Officer, Andy Smith.

Suez empty

Emergency Bulletin: Red Sea and Bab Al-Mandab Strait crisis update

Jan 4, 2024 |

The number of container ships diverting away from the Suez Canal and around the Cape of Good Hope had already reached 262 ships, or 12% of the global fleet by New Year’s Eve, rising a further 5% after the weekend’s Houthi attacks and will continue to grow until the Red Sea security situation is resolved. 

To put these figures into context; 17% of the global fleet diverting means that almost 4 million TEU of global container capacity is now delayed in transit. 

On trade lanes such as Asia-Europe, where all services would usually transit via the Suez Canal, the impact on available capacity is significant, and as a result rates are increasing rapidly.  

The SCFI index, which monitors spot rate development, reported gains of 80% in just one week, the largest week-on-week increase since the pandemic. Spot rates are now more than USD 6,000 per 40ft container, up some 220% compared to just one month ago.  

With vessel space and equipment availability expected to become more challenging in the coming weeks these elevated rates are expected to hold or even increase further.

The Asia-Mediterranean trade has also seen rapid rate increases, as vessels effectively take a more substantial diversion when transiting via the Cape of Good Hope, and back past Gibraltar into the Mediterranean. Spot rates as reported by the SCFI are now over USD 7,000/40ft, an increase of 177% compared to the start of December.

With the global container market being so interconnected, there is a knock-on effect to other trade lanes that are now already starting to feel the impact.  For example, carriers have announced surcharges on the trade between Turkey and North Europe as a result of the disruption to container flows and equipment re-positioning costs.

Also on the Transpacific trade, freight rates have risen to both the West and East Coasts, reaching their highest levels in over a year, and are likely to climb higher as capacity is expected to tighten from week 3, as carriers transfer ships to Europe, where the vessel shortage will become more acute.

With vessels diverting around the southern tip of Africa, those originally scheduled to return from Europe will be delayed by at least 2 weeks, with the largest drop expected in week 6 when weekly capacity will be down by approximately 30% compared to the current schedules.

Global port congestion, which appeared to have become a thing of the past, has climbed to an eight-month high. Rising above 2m TEU or 7.2% of the global fleet by the end of 2023, driven largely by an increase in congestion in North China ports, but the resulting bunching of vessels has also affected downstream ports such as Busan and Singapore.  

There are some minor congestion issues at various European and North American ports and while delays are currently manageable, more congestion is anticipated with the bunching ships diverting to the Cape route at the start of the week.

The timing of the current situation – the pausing of vessels, the subsequent rerouting and transit delays – could hit hard, when it coincides so closely with Chinese New Year. 

We are preparing everything that we can, with contingency planning to ensure operational issues are minimised and communicated to all our customers individually, with all available options and solutions to minimise the impact on your business.

We have formed a ‘Red Sea Crisis Task Force’ who are monitoring the situation, gathering all market intelligence, speaking with carriers and other sources, and ensuring that we provide the latest information as the situation continues to unravel. 

Our coverage is relentless, and we will continue to advise the latest situation, with agile solutions that can overcome every change in events. 

We ensure we are proactive and anticipate the issues before they occur and invariably have the platforms in place to avoid or mitigate the situation as they arise.

What we are experiencing now is similar to the pandemic evolution in logistics and the Suez Canal blockage over the last few years, only at a much quicker pace of disruption and impact. 

While many of the issues will only be felt and experienced in the coming weeks, due to the time lag between cause and effect, we are mindful to share this information with you now so that we can jointly plan and put under scrutiny any product movements that are essential.

We are always proactive and we will always have all of  the options available to mitigate impact of these events and supply chain challenges.

If you have any questions or concerns about the impact of the Suez situation on your Asia supply chain, or would like to discuss its wider implications, please EMAIL our Chief Commercial Officer, Andy Smith.

Category: Sea

Air | China | Sea | Supply Chain

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