(The Loadstar) – As the new alliance structure prepares to get underway tomorrow, with the Ocean and THE alliances launching services, shippers and forwarders are preparing for the possibility of severe supply chain disruption.
The drawing up of contingency plans was in part due to a growing sense of unease that shipping lines did not appear to be “on top of” managing the roll-out of the new groupings.
“The transition of the alliances has been hugely frustrating, in a very predictable way. We recently concluded annual contracts for our Asia-Europe business, which begins next month, and the number of carriers quoting Ocean Three and G6 services when bidding for shipments after 1 April was ridiculous… although not unexpected,” he added.
UK freight forwarder Westbound Shipping Services described the “mind-boggling transition” for carriers of their fleets and equipment into their new alliance homes.
It said: “Many schedules still published are incorrect, as many vessels have been taken out of service. This upholds the demand for space and in turn the recent rate stabilisation.”
Another effect of the rescheduling is a capacity crunch on North European exports to Asia, which is having a serious impact on shippers’ businesses.
Understandably shippers and forwarders in North Europe are angry.
One major UK importer said his logistics team was looking at using the overland rail route from China to Europe should chaos prevail, as some have predicted.
“We have been testing the rail services – loading 15-20 containers over the last six months or so, and as a product it has gone very smoothly. The lead times were as promised – 19-20 days from China into Germany, principally either Hamburg or Duisburg,” he told The Loadstar.
However, he did admit there had been challenges, particularly with the onward leg from Germany to the UK.
“There is an issue with the restitution of rail boxes back to the railway companies in Germany. The rail companies want those boxes back in Germany, so you have to consider what sort of backhaul cargo you could attract on the rail to go to Duisburg from the UK once you have finished devanning the box.
“The other option is to decant the container in Gernamny and then truck it to the UK. Overall, you are looking at 22-23 days from China to the UK stores, so there is a good speed differential, while the freight cost is clearly closer to sea-air products, or even air, than it is to the ocean freight equivalent.
“What we are trying to work out is whether the speed advantage is worth the extra cost, and so far we have been pleasantly surprised by the results.
“The China-Europe rail service are our contingency plan if there are problems with the roll-out of the three new services – admittedly, that’s quite an expansive contingency plan, but most of contingency plans are.
“In any case, I’m certainly comfortable enough with the service levels that I would throw much larger number so containers at it,” he said.
During Hapag-Lloyd’s results press conference in Hamburg on Monday, an irate German forwarder said shippers were calling him, “angry because Hapag-Lloyd said there was no opportunity [space] until the middle of May for China and Indonesia”.
Hapag-Lloyd chief executive Rolf Habben Jensen responded by saying that the eastbound demand had “been surprisingly high”. He said: “It might take some time until the situation recovers again, we are trying to take additional measures to alleviate the situation, but this cannot be done from one week to the next.”
Mr Habben Jensen said that one of the measures under consideration was to transport less empty equipment back to Asia to make room for extra loaded boxes.
However, there is some evidence that the solutions will come too late to prevent Asian customers sourcing their product from elsewhere in the world.
One major UK wastepaper shipper told The Loadstar this week that Chinese mills had already significantly cut back on their orders, due not only to the supply issue, but also because of the massive hike in freight rates over the past six months.
The Loadstar is fast becoming known at the highest levels of logistics and supply chain management as one of the best sources of influential analysis and commentary.
CAIRO, March 2 (Reuters) – The Houthi Transport Ministry in Yemen said on Saturday there had been a “glitch” in undersea communication cables in the Red Sea as a result of actions...
by Captain John Konrad (gCaptain) In the current American labor landscape, the stark contrast between the assertive strides of transportation unions and the maritime sector’s unique labor challenges is striking....
By Mikhail Flores MANILA, Dec 2 (Reuters) – Evacuations were under way in the Philippines after a quake of at least magnitude 7.5 struck the southern region of Mindanao on Saturday night,...
December 2, 2023
Total Views: 2164
Why Join the gCaptain Club?
Access exclusive insights, engage in vibrant discussions, and gain perspectives from our CEO.
This website uses cookies to improve your experience while you navigate through the website. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may affect your browsing experience.
Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.
Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.