An update from our Shipping partners – Pickfords Move Management 9th January 2024
Shipping Delays and Additional Costs
Due to the attacks on vessels in the Red Sea, shipping lines have in general made the decision to avoid the Suez Canal and the Red Sea and instead route their vessels around the Cape of Good Hope, causing shipping delays and increased transit times.
Vessels which were already in the area waiting to transit the Suez Canal have been diverted around Africa which will delay their arrival at their final destination. Ships now sailing will also follow this route and suffer an increased transit time of circa 10 to 14 days.
This contingency routing also comes with additional costs for the shipping lines and they have consequently introduced surcharges such as “war risk”, “Equipment or operational recovery” and “PSS” and the amounts levied vary dramatically, but on some routes, they’ve added as much as USD2,500.00 to the shipment cost.
Rerouting of vessels cause further issues for the shipping line, with equipment imbalances, and more vessels being needed to operate the same service. This has meant some shipping lines have made the decision to levy these surcharges on shipments from Europe to the USA, Canada and Mexico, even though these don’t transit the Suez Canal and wouldn’t typically be thought of as affected.
Not a quick fix to surcharges
Shipping lines have made it clear these surcharges are for operational disruptions, so it is unlikely they will simply disappear the moment vessels resume transiting the Suez Canal. From current opinion it will take a minimum of 6-8 weeks once all shipping lines are again transiting the Suez Canal for the operational issues to return to normal and the shipping lines to review the application of these surcharges.
Suez Canal transit – a fluid situation
Lastly, this is a very fluid situation, Maersk Line and CMA already tried to resume transit of the Suez Canal only for strikes on their vessels over the weekend to cause them to again pause sailings for an initial 48 hours. However, until the situation is brought fully under control further delays and disruptions are inevitable.
Issues at the Panama Canal too
Issues with the Panama Canal and the consequent delays are impacting shipments to both the US West Coast and the West Coast of Latin America. Climate change is having an unprecedented effect on the canal as a current draught has resulted in shipping delays causing a pattern of supply chain issues. Customers with shipments transiting through the Panama Canal should expect significant delays.
The Impact on our clients
A soon as we are aware of any impact on shipments we are advising our clients and assignees of these likely delays in advance of collection. Similarly, any knowledge we have on delays to arrivals will be advised to those affected. We will continue to update you with any further changes as we are made aware. Apart of the possibility of additional shipping costs, there may be knock on costs in terms of temporary accommodation, furniture hire and other interim measures necessary which may well fall outside of relocation policy.
If you wish to discuss the issues raised by this article, please contact Adrian Leach or Natalia Jesus-Oakes via info@hcr.co.uk