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

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 → North America

Rates

  • Rates have been climbing steadily, with ranges of $18,000-$20,00 for Asia-LA and $25,000-$29,000 to get to the Midwest.
  • MSC has announced a congestion surcharge from South China Ports, Hong Kong origins to USA and Canada destinations of $800 per 20ft container and $1125 per 40ft container from September 1st.

Capacity

  • More freight delays are expected in China this week, after typhoon In-Fa forced the closure of Shanghai’s container port and airport over the weekend. Warehouses stopped container loading and deliveries to terminals, resulting in container backlogs at the port.

Equipment:

  • Union Pacific has announced that it will progressively restart its services between Chicago and the West Coast. Affected ports include Los Angeles, Long Beach and Oakland in California and the Port of Tacoma in Washington

Ports

  • The Georgia Ports Authority chief predicted that demand for imported goods will likely be sustained into 2022, as companies scramble to rebuild stockpiles during an uneven rebound from the pandemic.
  • The latest Cass Freight Index data shows U.S. surface transportation costs increased 11% from May to June following supply chain disruptions that limited road and intermodal rail capacity.
  • Currently, 42% of vessels going into LA and Long Beach have to wait, along with 65% of vessels into Oakland, Savannah and Seattle.

Asia → Europe (Far East Westbound)

Rates

  • August rates seem to be stabilising, with Evergreen and Yangming keeping rates steady, or increasing minimally.
  • Rates from MSC to the UK range from $15,500-$16,500 for standard and $17,500 for premium.
  • CMA CGM announced a new PSS on all containers from Pakistan to North Europe and the Mediterranean of $1,000 per container.
  • CMA CGM announced a new Port Congestion Surcharge of $1,500 per container for reefer containers from all destinations to Fuqing Fuzhou, China.

Capacity

  • Container delivery at Chittagong has come to a standstill due to the closure of Eid-ul-Azha and severe lockdown across the country till August 5.
  • In early August, the partners of THE Alliance will close their ‘AL1’ Transatlantic service, with capacity being mitigated by the replacement of existing 3,200 to 4,250 teu vessels on their ‘AL3’ loop by 7,300 teu vessels.

Equipment

  • While the situation has improved we are still hearing reports that 30-40% of shipments are unable to find equipment. Once released, equipment is being taken up within 3 hours.

Ports

  • Antwerp is still being skipped by some carriers due to heavy congestion in favour of Bremerhaven.
Carriers POL 20GP 40GP 40HQ
HPL NINGBO Shortage Shortage Shortage
SHANGHAI Shortage Normal Shortage
YANTIAN Normal Normal Shortage
SHEKOU Normal Shortage Shortage
MSK QINGDAO Shortage Shortage Shortage
SHANGHAI Normal Shortage Shortage
NINGBO Shortage Shortage Shortage
Nanjing Shortage Normal Shortage
Xiamen Shortage Normal Shortage
YANTIAN Normal Normal Normal
SHEKOU Normal Shortage Normal
NANSHA Normal Normal Normal
HONGKONG Normal Normal Normal
SHANTOU Normal Normal Shortage
ONE YANTIAN Normal Normal Normal
SHEKOU Normal Normal Shortage
XINGANG Normal Shortage Shortage
QINGDAO Normal Normal Shortage
SHANGHAI Normal Normal Normal
NINGBO Shortage Shortage Shortage
ZIM XIANGANG Normal Shortage Shortage
NINGBO Normal Shortage Shortage
SHANGHAI Normal Shortage Shortage
YANTIAN Normal Shortage Shortage
SHEKOU Normal Shortage Shortage
HMM SHANGHAI Normal Normal Normal
NINGBO Normal Shortage Normal
YANTIAN Normal Normal Normal
SHEKOU Normal Normal Shortage
MSC SHANGHAI Normal Shortage Normal
NINGBO Normal Normal Shortage
YANTIAN Normal Shortage Normal
SHEKOU Normal Normal Normal
EMC YANTIAN Normal Normal Shortage
SHEKOU Normal Normal Shortage
NINGBO Normal Normal Shortage
SHANGHAI Normal Shortage Shortage
QINGDAO Normal Shortage Shortage
OOCL YANTIAN Normal Normal Normal
SHANGHAI Normal Normal Normal
NINGBO Normal Normal Normal
CMA QINGDAO Shortage Shortage Shortage
SHANGHAI Shortage Shortage Shortage
NINGBO Shortage Shortage Shortage
YANTIAN Shortage Shortage Shortage
SHEKOU Shortage Shortage Shortage
cosco YANTIAN Normal Normal Normal
SHEKOU Normal Normal Normal
SHANGHAI Normal Normal Normal
NINGBO Normal Normal Normal
QINGDAO Normal Normal Normal
DALIAN Normal Normal Normal
XINGANG Normal Normal Normal
YML YANTIAN Normal Normal Normal
SHEKOU Normal Normal Normal

Europe → USA (Transatlantic Westbound)

Rates

  • CMA has announced a PSS from Europe to North America, effective from August 1st:
    • East Coast: $1,000/ 20′, $1,250/ 40′
    • West Coast: $1,000 /20′, $1,500/ 40′

Capacity:

  • ONE and Yang Ming are reported to not have space until mid-August, though MSC have some pockets of space.
  • A streak of blank sailings due to vessel maintenance will be implemented by THE Alliance and Ocean Alliance in week 29 and 31 on the USWC service.

Ports:

  • Hapag-Lloyd have confirmed a Congestion Surcharge of USD 350 per container for all intermodal moves in the US effective upon carrier receipt of cargo on or after August 1, 2021 until further notice.


Air

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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