Overflowing ships, unreliable schedules and higher tariffs

17 November 2020

The reliability of the container shipping companies deteriorates further. An analysis by the Danish consultant Sea-Intelligence shows that only 65% of vessels arrived on time during Q3. At the same time, tariffs saw unprecedented increases to a level higher than ever seen in the last 10 years. Unfortunately, the situation is unlikely to improve as long as the Coronavirus crisis continues.

High tariffs and Peak Season Surcharge (PSS)

The issues in container shipping are a global phenomenon. The temporary halt on sailings resulted in the balance between supply and demand of tonnage is to the advantage of the container shipping companies. Nonetheless, there is an unexpected volume increase. This combination is creating sky-high tariffs.

The sea freight tariffs are at their highest levels in 10 years. A 40ft container from Asia to Europe now costs an average of USD 5000. A continuous upward trend, so it seems, which we do not expect to abate as the busy period around the Chinese New Year is just around the corner.

To add to this, MSC, ONE and YML have announced a peak season surcharge starting on 15 and 18 November. This surcharge varies between USD 400 and USD 500 per TEU. From 1 December, all shipping companies will add a PSS and what’s more, increases to the current peak season charges have been announced. If you are a Ritra Cargo client, we will make sure to personally keep you updated.

Service provision reliability

The service provision at transhipment ports such as Colombo, Singapore and Tanjung Pelepas is deteriorating by the day. This is partly due to measures relating to Covid-19, such as an evening curfew, quarantine and strike actions. There is also limited labour capacity, which means connections are not guaranteed. In addition, the shipping companies sometimes skip port because ships are already at capacity and the crew is trying to stick to the original schedules. All the above is causing delays.

What can you do?

We are doing everything within our power to make sure your containers leave on time. However, we are not always able to prevent delays en route. The situation is bad, especially in the transhipment ports and delays of 7 to 10 days are sadly no longer an exception.

As such, we urgently advise you to take these issues into account when planning our deliveries. In addition, please ask your suppliers to make bookings as early as possible and provide an exact itemisation of the shipment, such as the number of cartons and the weight. This will allow us to prevent delays as much as possible.