Oceanic Challenges Part 1: The Transatlantic
Transatlantic and transpacific routes are seeing unique and significant challenges. TOC is focused on working with our customers and carriers to provide the best possible service.
Whether coming to North America from Europe on the North Atlantic or from Asia on the Pacific, carriers and conditions on both lanes are raising unique challenges to maintaining fluid and operating supply chains.
Our goal with this Market Advisory is to provide detailed information on what is causing challenges on the transatlantic. A second advisory this week will speak in greater detail to what is happening on the transpacific.
We are facing three challenges on the transatlantic trade lane: UK/European haulage, terminal congestion and blanked sailings.
When the United Kingdom left the European Union on January 1st, the ease with which truckers moved back and forth ground to halt. This was due to requirements for declarations going into and out of both economies.
The European Union was the destination for 43% of the UK’s exports in 2019. Shipments departing for the EU now require transit paperwork to be issued by Her Majesty’s Customs and Excise. There is both a shortage of customs officers to process these documents, as well as additional financial guarantees that many agents have already fully obligated and are working with the government to increase.
With great thanks to Johannes Barthels of ProTrans Global for keeping us abreast of conditions in Germany, the congestion and delays in Germany and other European ports are leading to congestion so severe that terminals are unable to operate.
Three of the four leading terminal operators at Hamburg port (CTA, CTT and CTB) now have a rule in place that export containers cannot be delivered more than 48 hours before a vessel is scheduled to arrive. This causes backups for loading and demurrage for holding equipment because of the delayed and ever-changing schedules for vessels based on the situation at prior ports of call.
Together, these three terminal operators account for 80% of the capacity at the port of Hamburg.
We have talked before about blanked sailings, the bane of the exporter (and importer). A blanked sailing is when a carrier is expected to operate a service as part of their regular, fixed-day-of-the-week operations and will not have a ship that week. Until the pandemic, blank sailings were the voluntary choice of the carrier for the purpose of aligning bookings with capacity to preserve rate levels or to put a vessel in drydock for repairs.
Today, blanked sailings are occurring because vessels are so delayed, or containers so out of position, that only by making the determination that a vessel will not meet an intended call can they both attempt to get containers where they need to be, such as empties back to Asia, and get the vessels back on their intended schedules.
The intended and unintended consequences are backups of cargo in shipper and forwarder warehouses, containers and wheels waiting to be loaded and no way to easily change a booking and send the container to another port of export to take advantage of another potential sailing.
What can be done?
TOC Logistics, ProTrans Global and the rest of our network are focused on communication and carrier relationships to minimize what is an unquestionably impactful situation. We continue to encourage shippers to book early and provide accurate forecasting and allocations. For cargo above and beyond allocated amounts, we can work to negotiate ad-hoc rates that secure one of the few available spots on these ships, or secure an estimate from an airline for one of the multiple passenger freighters (or “phreighters”) in operation between Europe and US gateways.
For the most up-to-date information or to discuss options for cargo which has been directly impacted by a blanked sailing or other delay, contact your TOC Account Manager today.
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