Ningbo

Port congestion eases, but challenges will continue to remain

Nov 25, 2021 | , ,

Asia’s largest ports are showing signs that congestion is easing ahead of the Christmas holiday season, with Shanghai traffic declining 0.2%, Hong Kong ship count dropping 10.4% and Singapore dropping 14.7% according to an analysis by Bloomberg.

While any easing of volume is welcome, Bloomberg’s results are based on a single week’s traffic and the latest data from the World Container Index shows basically no changes in pricing at all compared to the previous week.

It would be great to think that Bloomberg’s advisory, that a drop in volumes, is the beginning of a large decline and a reversal to normal rate levels, but we would suggest caution in concluding this just yet. Or for the foreseeable future – as there are many mixed messages currently – and most are based on short term data and not considering the long term effects and impact, as an observation.

It seems more likely that the worst pressure on the trans-Pacific trade might have been alleviated, but the global capacity shortage persists and we cannot see a similar impact on Asia-Europe or Europe-North America.

Bad weather, accidents, COVID-related work constraints and increasing spending, due to COVID19 related consumer demand, have contributed to Chinese terminal lockdowns and logistical port challenges for almost two years, resulting in record levels of congestion, from manufacturing hubs in China to import gateways in the US and Northwest Europe.

Comparing levels of container congestion across China, 2021 started at similar levels to the previous two years, with the count of vessels waiting averaging just 88 per day between January and April. However, over the past six months, there has been a significant increase in the number of vessels waiting and numbers are still higher than they were at the beginning of the year.

Levels of congestion in China peaked at the end of July at 361 vessels, as typhoon In-Fa struck. With vessels unable to safely enter a port, queues built up and caused further disruptions to schedules. Since then, over the past three months, we have seen Container congestion gradually decrease in China, but there were still around 180 vessels, a total of 936,073 TEU, waiting off China at the end of last month.

Delays are still being felt in the UK, as retailers try to fill shelves in time for Christmas, with 40% of the UK’s containerised imports moving through Felixstowe alone.

The port has received around 45% fewer container ships this month compared to the same period in 2020, and around 50% less than the same period in 2019, which reflects carriers missing Felixstowe on rotation and suggests that the port is struggling with turnaround times, as a severe shortage of HGV drivers and terminal congestion means boxes are not leaving port quickly enough to clear space for the return of empty containers. None of this helps the disruption and challenges being experienced daily, which seem to be relentless.

While the current drop in Asian volumes is most likely a blip, it may be that we will see a lull in demand in the New Year, with the Christmas period ending and Chinese New Year.

This could ease congestion slightly, but if the high number of vessels waiting remains, it’s possible that clearing the backlog of vessels may extend into the second quarter of 2022.

Importers and especially those shipping via Felixstowe stand to benefit significantly from our new 750,000 sq ft and 100K pallet position mega distribution centre, located beside the container port.

The new Felixstowe Mega Distribution Centre offers the smart executive access to plenty of space and the opportunity to cut costs, simplify processes and improve cash flow. 

We are creative with our solutions, investments and customer engagement. So that is what you need, we deliver, to build satisfaction in the long and short term. 

Please contact Grant Liddell to discuss further – it will be productive and have a meaningful outcome.

FMDC

Mega Felixstowe DC offers so much more than space – it’s UNIque

Nov 25, 2021 | , , ,

With warehouse space becoming increasingly scarce, access to 100,000 pallet spaces would be welcomed by most shippers. The new group Mega Distribution Centre beside Felixstowe port, offers the smart executive access to plenty of space and the opportunity to cut costs, simplify processes and improve cash flow.

The new 750,000 sq ft Felixstowe Mega DC (FMDC) is just 400 metres from the UK’s largest container port, offering shippers all the benefits of port-centric logistics.

Rather than transporting goods away from the port, often hundreds of miles, to inland warehouses, the port-centric model lets you replace costly, time-consuming links in the supply chain, with simple solutions from ship to doorstep.

1. Reduce cost

Immediately remove the difficult to arrange and often costly haulage from port to inland warehouse as well as totally avoiding the high - and often unavoidable - costs of quay rent and container detention.

2. Reduce complexity

Simplify the supply chain by removing handling stages through the storage and distribution process. Holding buffer stocks at the point of import, until call-off and direct delivery, avoids wasted freight miles, provides buffer stock and frees up inland warehouse resource.

3. Quicker access to goods

Port-centric warehousing provides the quickest route for product to inventory, reducing lead times and giving visibility of the quality and quantity of goods in the fastest way possible.

4. Improved cash flow

Bonded storage improves cash flow by deferring payment for duty and VAT until goods are released for sale in the UK. Calling off stock as it is needed provides cashflow control and contingencies back into the supply-chain planning.

Located on a 28-acre site alongside the A14 and Felixstowe, the 750,000 sq ft fulfilment centre opened in the second quarter of 2021. It is British Retail Consortium (BRC) food grade accredited and Customs-bonded for wet and dry goods.

     
  • 400,000 sq ft narrow/wide aisle pallet racking
  • 200,000 sq ft eFulfilment zone
  • 100,000 sq ft cold store
  • 80,000 ambient pallet spaces
  • 18,000 pallet spaces of frozen storage
  • 10 levels of racking
  • 4 mezzanine floors
  • Advanced electrical mechanical handling equipment
  • Significant green credentials

If you need and desire a strategy that is future-proof, that will deliver your product to the right place, at the right time, please contact Chris Carlie. We can scope and profile your full requirements and aspirations, to demonstrate how we can assist you in a challenging environment. 

We recommend a collaborative approach, to identify the many other benefits and opportunities we can offer within your supply chains, that will allow you to focus on distribution and manufacturing of your core business platform. 

We would be delighted to arrange a virtual tour, online meeting and ideally a visit and tour of the facilities that truly are market leading and enhancing to our customers.

4fold 1

Foldable containers may be cure. Just not yet…

Nov 25, 2021 | , ,

The bulk of the world’s trade is shipped in intermodal shipping containers, which have remained largely unchanged since IMO standardisation 50 years ago, but innovation may be the key to reducing supply chain congestion. Is this a new era of global container shipping?

Few tools of the global economy have survived without major innovations as long as the shipping container and the continuing pandemic-linked supply chain disruption is presenting a significant opportunity to address that.

As ports, terminals and warehouses get congested with containers, both empty and full, the conditions are increasingly favourable for a product innovation that failed to catch on before the pandemic. Shipping containers that collapse to as much as one-fifth their usual size.

The cost of repositioning empty containers to places where they’ll be loaded is about $20 billion, according to the Boston Consulting Group and many will spend days and weeks taking up space in already-jammed holding areas and depots, compounding delays along supply chains.

In 2013, the Dutch container company 4Fold’s 40-foot metal boxes became the first foldable units to get certification from the Container Safety Convention and International Organisation for Standardisation, meeting standards required by shipping lines, terminals and rail companies.

Today more than 15 carriers, shipping via 60 ports worldwide are testing the Delft, Netherlands-based company’s environmentally friendly containers that can be folded into a quarter of their volume, taking up less space on trucks, ships and docks.

The world’s largest shipping line, Maersk, has referred to foldable containers as the “dream of the shipping industry” and leading consumer-goods producers, including Procter & Gamble, are also testing the technology.

Despite sparking hope among carriers and shippers, as the answer to making equipment available more quickly, higher upfront costs and hesitancy to turn to a new business model have so far kept foldable containers from becoming mainstream.

As companies find themselves more pressed to find answers to supply-chain congestion, the trade-offs of investing in a new technology might become smaller. The US-based foldable-container company Staxxon LLC gained full certification for its 20’ product at the height of the pandemic and is planning to put them on the market next year, suggesting it has dozens of potential buyers who’ve indicated interest.

Carriers could save up to 57% in inland transportation costs by relying on foldable containers, according to Singapore University. And despite higher purchase and annual maintenance costs, foldable units would still be a more cost-beneficial option, their research found.

The challenge is defining the optimal mix of foldable and regular containers that carriers should maintain in their inventory.

Too many and the purchase costs could offset the benefits. Too few and you would struggle to find three other foldable containers to create the single unit, that generates efficiency and cost-savings.

Metro are innovators and we will be watching the development of this story with interest. And ready to actively participate in testing, evaluating or investing, in the best interests of our customers. 

We also own many of thousands of containers ourselves within our group of businesses – so know what we are talking about. Please direct any questions or requests for creative solutions to Elliot Carlile who is heading up the programme for Metro clients.

Header image courtesy of HOLLAND CONTAINER INNOVATIONS NEDERLAND B.V.

warehouse full

Experts warn the UK is running out of warehouse space

Nov 25, 2021 | , , ,

Leading commercial property agents have warned that the UK could run out of warehouse space within a year, following the surge in online shopping and supply chain disruption triggered by the COVID19 pandemic.

Demand for warehouses and vacant space is being driven by eCommerce, manufacturing and logistics support businesses that are having to hold inventory that cannot be consumed, due to technical component delays that are depleting stock and later than required consumer products, that are having to be ‘shelved’ until they can be brought to market at the right time of year. Raising the risk of the UK running out of available warehouse space, as has been widely reported in both the trade and national press.

Even though developers have been quick to respond to this demand, newly developed space is being taken up fast, keeping available stock low and falling below 50 million square feet (the lowest recorded) which is close to the same amount of space secured in the first nine months of 2021. Suggesting there may be less than a year’s supply available.

eCommerce, post and parcel providers took an average of 6m square feet p.a. between 2015 and 2019, rocketing to over 15m square feet p.a. in 2020 and 2021 – and continuing to grow exponentially.

The proportion of UK retail spend taking place online rose from 19.1% in February 2020, ahead of the first coronavirus lockdown, to a peak of 37.1% in January 2021, bringing forward by three years the date when the UK’s online sales are expected to overtake in-store sales.

Research by Retail Economics predicts that UK retailers will be the first across Europe’s biggest retail markets to make the shift, with 52% of all transactions set to occur online next year.

The pandemic has also highlighted the fragility of supply chains built for maximum efficiency, particularly some JIT (just in time models) encouraging executives to seek more storage space for safety stock. 

Having product and components where you can access them locally is becoming the normal approach, in a world of logistics and transit beset by uncertainty and chaos. Businesses are having to, or have already, adapted their supply chain strategies accordingly.

In the near term, the impact of high demand for warehouse space will be rising costs for those needing storage, which is likely to trickle down into price increases for consumers. Along with many other dynamics and variables that are changing on a monthly basis.

Leading commercial agents Cushman & Wakefield, told the Financial Times that developers had been fairly quick to respond to the shortage of warehouse space, but warned: “When you look at how quickly development is being taken up, there’s probably not enough.”

Cushman & Wakefield warned: “If anything, availability will get worse before it gets better.” Much like many other elements of the supply chain jigsaw puzzle, unfortunately.

Metro’s customers are protected from the impact of this squeeze on warehouse space, with access to the group’s new 750,000 sq ft Mega DC. SEE MORE

Strategically located adjacent to the UK’s biggest container port, Felixstowe, the Mega Distribution Centre, offers the unique benefits of port-centric logistics alongside 18,000 pallet spaces of frozen storage and ambient storage space for 80,000 pallets.

Category: Supply Chain

Coronavirus | Sea | Supply Chain

Latest News in this category