You may be aware that there are still major issues with the global shipping industry which is having a serious effect on manufacturers around the world, and their ability to deliver stock to customers.
This is affecting almost every sector that relies on sea freight, whether that is cars, toys, computers, medical equipment, industrial machinery or HVAC.
This goes beyond the production and raw material shortages that have been caused by the global pandemic that I’ve written about here, and is a result of what is known as ‘transhipment’.
Although the word has been around for ages and describes the offloading of cargo from one ship to another, or from a ship to a port, the current context is a fairly new phenomenon. It has come about as an attempt by the global shipping industry to address what remains an acutely imbalanced market.
Shipping companies are now prioritising the placement of ships, rather than the goods on those ships
Ports are overwhelmed
Basically, lots of ships are still in the wrong place and this is leading to pinch points around the globe. We’ve already seen ports both here in Europe and beyond, overwhelmed by the number of ships turning up, unexpected and unscheduled.
These ports are also trying to cope with the pandemic themselves so may have reduced operating capacity. Ships have to spend days at anchor or have even been turned away.
For us, this has seen containers that should have docked at Felixstowe, end up in Rotterdam, needing collection and transport by road from Europe instead.
So, lots of ships aren’t where they should be and to rectify this, shipping companies are now prioritising the placement of ships, rather than the goods on those ships.
This is all part of a global realignment of the shipping industry which, like everybody else, has been affected by COVID.
We also mustn’t forget the blocking of the Suez Canal by the Ever Given, which saw thousands of ships divert the long way around Africa – adding weeks to their journey and putting them seriously off schedule and out of place.
Transhipment has led to containers being offloaded in unplanned and unknown ports, while the ship is reassigned to a route than will eventually get it back on track with its previous schedules.
What this means for manufacturers though, is that we all end up with containers where they should not be, and these can be stuck in the wrong place for weeks on end, until the shipping company sends another boat to pick them up and send them on to their correct destination.
We’re also given no notice of this until it’s far too late and are completely beholden to the shipping companies for updates.
Just this week, we learnt of 7 containers that were offloaded at the wrong port and this will potentially affect scores of projects here in the UK
A lack of certainty
This does mean that once goods have left the factories, no one can be certain of the delivery dates that the shipping companies have agreed to, until the goods are in their destination port.
This is adding weeks to delivery schedules and adding even more uncertainty to an already beleaguered construction industry.
As for alternatives, our factories in Scotland and Europe are recovering from COVID restrictions and face the same material shortages as all other production facilities so they are unable to make up any shortfall.
We have also looked at air freight, but this only really makes sense for small products such as controllers and even here, the timelines are increasing to weeks as manufacturers from all other sectors look to this route.
Normal service will resume eventually
Until global shipping gets itself in the right places again, we’re trying to rectify the situation as best we can by tracking individual containers on a weekly basis so that so that we can be aware of any unplanned hold ups, much earlier in the shipment.
We’re also talking to our customers so that they understand the situation and we can build as much certainty about delivery dates as possible.
In this way, we hope to be able to provide more certainty of stock delivery, or at least notify customers as soon as we become aware of any issues, whilst the shipping industry realigns itself and we get back to something approaching ‘normal service’.
Alex Black is Operations Manager