URGENT OCEAN MARKET UDPATE – October 31, 2018
TOC LOGISTICS INTERNATIONAL INC. here offers an ocean market update with information on the concerning water levels in the German inland waterways and rivers. Because of an extremely long and dry summer, with a lack of rain in the past six months, the water levels in the rivers fell to historic lows. Pictures showing the low water levels are below.
Low Water Surcharges
As a result of the low water level, the barge (inland vessels) can only load 15%-20% of their capacity, in an effort to avoid running aground; meaning 80-85% of the containers assigned to barge/inland waterway routings are sitting at inland waterway ports and not moving anywhere.
- Impact: 50% of all containers leave the ports of Antwerp & Rotterdam by barge. These containers are now searching for new routes. Because of this, the capacity of the road carriers, as well as the rail carriers are overwhelmed. Finding available trucks or railcars will be extremely difficult, and all rates (truck drays, FTL’s and rail moves) are skyrocketing.
Congestions in Antwerp & Rotterdam
Because of the low water on the German inland waterways, the ocean carriers are having trouble getting import freight, coming from Asia, out of the terminals in Rotterdam & Antwerp. The terminals are over 100% capacity and are overloaded. Terminals are moving slowly and extra time is being taken because containers are being buried under the continued onslaught of arriving containers, and making it difficult to find and maneuver containers to truck or rail terminals for delivery or transfer. It is taking 2x-3x longer to load trucks and trains. Because of this, there will be extreme congestions in the ports of Rotterdam & Antwerp.
- Impact: Rates for alternate transportation, like truck and rail, will be rising because of the congestions in the port of Rotterdam & Antwerp.
Empty Container Supply
Due to the low water situation and the congestion in the ports of Rotterdam & Antwerp, the supply of empty containers at inland CY’s (container yards) is critical. The primary reason for this is that loaded containers are now stuck in the ports. With carriers not being able to get containers to their recipients, this means they are not being unloaded, and empties are not being positioned at the inland CY’s and made available for exports. Shipping empty containers to the inland CY’s is not happening because all available truck/railcar capacity is focused on getting full-containers out of the seaports. Empty containers may only become available from the seaports, and not inland CYs very soon.
With the potential for only obtaining empty containers from seaports, and the reduced capacity and availability of trucks/drivers to recover them, the costs for ocean exports from the European Union to North America is likely to spike in the coming days until such time as the rainy season starts and the rivers fill back up.
TOC Logistics International Inc will be publishing an emergency congestion surcharge, in line with the announcements by steamship lines and trucking companies, within the next few days. These charges will ONLY apply if applied to TOC by EU carriers; and will likely be ad hoc, or situational, in nature. We do not expect this to be an across the board rate hike, but only as it happens. Meaning, it might apply one week, but not the next.
We have no other choice but to warn of a semi-Force Majeure situation loosely related to weather.
Emergency Congestion Surcharges will be provided to the financial stakeholders at our clients within the next few days; but, again, will only apply situationally and not across the board or continuously.
Please do not hesitate to reach out to our team with any questions.
Thank you for allowing TOC Logistics International Inc. to serve you.