ALARMING DEVELOPMENT IN THE TRANSPORT SECTOR
25. Nov 2020
Uncertainties and turbulences determine the current state of the transport sector. Cargo ships from Far East to Europe are fully booked, shipping companies are charging exorbitant prices. The situation of all modes of transport has been drastically worsened by massive supply bottlenecks for goods from Asia.
Despite foresighted bookings of sea freight ex Far East, shipping companies currently do not make any binding promises of dates, but only confirm bookings on a non-binding basis without guarantee. Restrictions on transport capacities by shipping companies and a high volume of transport, especially ex China, lead to overbooking of ships. Booked departures are sometimes cancelled.
As a result, the transport volume at subsequent ports (e.g. Singapore) is not fully covered, so that ports are completely overcrowded.
In addition, the current lack of availability of sea freight equipment also contributes to increased shipment delays, because empty containers are not always available where they are needed.
These changes in the transport sector have an extreme impact on the freight price. Meanwhile transport companies are charging exorbitant additional costs for sea transport as well as for air freight.
Some examples of cost development (Müller: Corona-Kirse: Massive Lieferengpässe für Waren aus China (Huge supply bottlenecks for goods from China), 2020, https://www.spiegel.de/wirtschaft/corona-krise-massive-lieferengpaesse-fuer-waren-aus-china-a-84dc243c-b91c-4048-b4cb-673a50d537ae):
- Sea freight: Prices of more than 5000 dollars for the transport of a 40-foot sea freight container
- Air freight: Airlines mostly charge extremely high costs. The rates change daily.
From a current perspective, we assume that this unsatisfactory situation will continue or even worsen until the Chinese New Year (12.02.2021).
There are no delays in the yarn production itself - these are entirely due to the freight problem.
We would therefore ask you to evaluate your stocks, if necessary, to plan for a higher safety buffer and to give up additional demand earlier. Please understand that due to the current circumstances we are unable to make any fixed and short-term commitments to deadlines.
Of course, we will be at your side as a competent and trustworthy partner even in this difficult situation. Together with you we would like to work out a trouble-free and complete supply - please contact us.