Car shipping post Covid

RoRo car carriers and the Red Sea

Jan 10, 2024 | ,

Despite the widely reported news of container shipping lines rerouting vessels around southern Africa to avoid danger to crew and cargo in the Red Sea following attacks on ships by Houthi militants, the RoRo car carriers have a mixed policy on whether to transit through the Suez.

While the supply chain and mainstream press has been widely reporting the decision by the container carriers to suspend sailings through the Suez Canal until the safety of their vessels can be guaranteed, there have been very few public announcements from RoRo car carriers, no reports by the trade press and even the web sites of the three largest carriers are devoid of updates.

To provide you with the latest intelligence we have spoken with our contacts at the six largest PCTC RoRo carriers, to learn what sailing strategy they are following and can confirm that it is an even split, diverting around the Cape of Good Hope and transiting through the Suez Canal (with some limitations).

The carriers continuing through the Red Sea will do so under caution with the support of naval forces and with one carrier noting that only vessels not owned by Israel related entities will continue via the Red Sea.

Carriers that are rerouting via the Cape of Good Hope have also advised that vessels will no longer call into the Middle East, removing ports such as Jeddah and Aqaba from their schedules.

Sailing around Southern Africa will increase transit times by 10-14 days each way, but it is a safe routing and until the security situation in the Red Sea improves is the most prudent strategy.

However, the additional transit time effectively removes much needed RoRo capacity from the market, with something like another 30% of volume required to maintain current schedule levels.

Container shipping is experiencing the same extended transit times around the Cape, but it does not yet have RoRo’s capacity issues, which means that our container shipping expertise still provides an alternative transport solution for finished car movements.

If you would like any further information or have any questions or concerns about your Automotive supply chain, your export logistics platform into The Middle East, Africa, Indian Sub and beyond or any of the content and developments outlined here, please EMAIL our Automotive team who are standing by to assist.

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Retailers warn of delays after Red Sea attacks

Jan 10, 2024 | , , , , , ,

Leading retailers including IKEA and NEXT have warned that the diverting of vessels aways from the Suez canal and around southern Africa will result in delays and may restrict the availability of certain products.

Re-routing container ships around Africa adds 3,500 nautical miles to a typical journey from Asia to Europe and potentially adds three or four weeks to product delivery times and with delays to deliveries threatening the availability of some products retailers are evaluating other supply chain options.

The problems have not impacted Christmas or New Year sales stock, which arrived more than a month ago, but could squeeze spring trade if not resolved shortly.

While it is not yet clear what impact late deliveries will have, it is possible that the problems could renew pressure on inflation, which has fallen to 3.9% in the UK, with the disruption already putting pressure on oil prices.

In the short term retail goods will take longer to be shipped, as they are redirected via longer routes, which means a knock-on impact to availability and prices as a result of higher transportation and shipping insurance costs.

About 19,000 ships navigate the Suez canal every year, which represents about 30% of global container traffic, so the diversion accounts for about 23.5% of current global container traffic.

The Suez Canal is consequently one of the world’s key trade routes, particularly for goods moving between Asia and Europe, and the disruption comes at a time when many retailers are trying to move orders ahead of Chinese New Year in February, when factories will close.

Some retailers have warned that with container shipping costs increasing due to the disruption, prices in the shops could rise further. 

The London Textile Fair took place this week with 300 global manufacturers including from Europe, Pakistan, Vietnam and China exhibiting.

Manufacturers have been wary about the additional expenses incurred as a result of the African diversion, with shipping costs increasing between 20% and 400%, although it appears that many retailers are taking on the surcharges. 

A number of UK retailers are instructing their vendors to ship all orders by air freight and are covering the extra costs.

Despite the Red Sea challenges the retailer and manufacturer feedback from the fair has been largely positive, with production prices in many regions stabilising compared to last year and buyers optimistic, as economic pressures ease.

Metro support retail customers’ success, by protecting their supply chains, with innovation and resilience.  

Our unique blend of experience, systems and processes means that we can introduce new methods and efficiencies to optimise global inventory, reduce shipping costs and streamline the entire supply chain. 

Please EMAIL Elliot Carlie to discuss how we can optimise your supply chain and help you overcome the challenges you currently face.

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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.

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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.

Category: Sea

Air | Coronavirus | Sea | Supply Chain

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