Transport Update 28th July 2021

Welcome to the Zencargo weekly freight market update – the latest news from our freight and procurement teams on the real experience of shippers.

This week: The UK haulage crisis

• Ocean

• Air

• Road

In Focus: Driver shortages hobble UK haulage

While driver numbers have been slowly getting worse for years, the twin shocks of Brexit and Covid-19 have pushed the UK haulage situation to critical levels, with the market now facing a driver shortage of between 40,000 and 70,000 drivers.

What’s behind the shortage?

• The population of drivers is retiring at a quicker rate than it is hiring; you cannot become a HGV driver until 21 and it is expensive to train (approx. £5000).
• The UK had been recruiting heavily from mainland Europe to overcome shortages. Brexit and travel restrictions from Covid-19 have led to many drivers returning to Europe.
• Self-isolation rules are putting even more pressure on the reduced workforce.

What are the consequences?

Haulage failures are becoming more common and will continue as drivers switch jobs to follow higher wages, taking on higher revenue jobs over lower revenue jobs. Drivers are now in a position where they can choose which shipments they want to cover.

Some carriers are now introducing a driver shortage surcharge similar to fuel surcharges. It is likely prices will increase further over the coming months to cover rising wages

This week the Government announced a package of measures to support the industry including increasing testing facilities, improving working conditions of drivers, working with retirees to re-join the industry and looking into ways to attract new drivers to the industry. Despite this, however, shortages are likely to remain for the foreseeable future.

What can shippers do?

While delivery information is usually needed at least 14 days before arrival, we are now seeing instances where haulage cannot be covered for over 3 weeks. Deliveries now need to be planned weeks before arrival, so forecasting and visibility are more important than ever.

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Ocean

Asia

US market

• PVG has been affected by the typhoon, with the airport and seaport being closed since last weekend. This has created backlogs with flights not being reinstated until Wednesday 28/07.
• Space is critical and rates are high.
• Airlines have not released schedules for this week due to them trying to clear the backlog.
• Spot rates available for heavy/dense cargo as well as volume cargo.
• For all airports – rates and space must be checked on a case by case basis.

EU market (base airport like FRA/AMS/LUX, etc)

• PVG has been affected by the typhoon, with the airport and seaport being closed since last weekend. This has created backlogs with flights not being reinstated until Wednesday 28/07.
• Space is critical and rates are high.
• Airlines have not released schedules for this week due to them trying to clear the backlog.
• No real change on the Asia-Europe trade lane, with rates reducing very slightly
• China Cargo Airlines canceled its flight on day 3 into AMS and Air China has reduced flights to just day 3 and day, reducing the capacity into AMS.
• Rates and space must be checked on a case by case basis.
• Spot rates available for heavy/dense cargo as well as volume cargo.

UK market

• PVG has been affected by the typhoon, with the airport and seaport being closed since last weekend. This has created backlogs with flights not being reinstated until Wednesday 28/07.
• Space is critical and rates are high.
• Airlines have not released schedules for this week due to them trying to clear the backlog.
• There are good spot rates out there if other, regional airports can be used – but there are restrictions on commodities, so it is always best to check.
• There are direct flights with CA/BA, AIR-AIR by SQ and normal air-truck service.
• Rates and space must be checked on a case by case basis.
• Spot rates available for heavy/dense cargo as well as volume cargo.

Americas

• Rates remain mostly the same this week, into UK, Europe and Asia
• Space remains constricted due to reduced capacity.
• US hauliers are still over capacity. We are facing delays and storage charges due to long turn
• around times with breaking down freight and then long queues at the airports to collect freight.
• Main hubs such as ORD and LAX are the worst affected.
• Certain ground handling agents in LAX and ORD are still severely behind with breaking down freight. In some cases this is taking up to 3 weeks. It is important to ask advice from a US agent when choosing your carriers into these airports as the ground handling agent is determined by the carrier.

Europe

• Rates into North America and Asia remain stable this week.
• Capacity to most regions remains severely restricted
• Hong Kong has banned all passenger flights from the UK to Hong Kong to curb the spread of the Delta variant of Covid-19.

Road

Availability

Availability generally reliable across all routes and regions.

Rates

Rates are fluctuating in and out of Italy, but remain stable across consolidated, groupage and dedicated trailers on other routes.

Customs

Border situations have improved considerably with clearances running smoothly.

The route ahead

The information that is available in the Weekly Market Update comes from a variety of online sources, partners and our own teams. Click below to learn more about how Zencargo can help make your supply chain your competitive advantage.

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