5 Jul 2021

Our Outlook on the Current Import Crisis

Whilst international shipping between the UK and Europe, as well as around the globe, has been heavily impacted by a number of factors – Brexit, the pandemic, and the shortage of qualified LGV and HGV drivers in the UK transport industry, to name a few – the latest complications brought about by the closures at the Yantian port in Shenzhen, China (the third-largest container port in the world) have only succeeded in adding fuel to the flames. 


“The Chinese government has been very proactive and stringent in its approach to outbreaks of Coronavirus amongst Chinese citizens,” comments VWM Sales Director, Jason Varey. “When the virus was detected amongst some of the Yantian port workers back in May, there were immediate efforts made by the local authorities to disinfect the area and enforce quarantine measures, which ultimately led to widespread staff shortages across the port. 


“As a result, the port has been facing substantial issues with congestion over the past few weeks, which in turn has led to huge disruptions in the global supply chain. It’s now being reported that container ships awaiting cargo bound for America, Europe, and other areas of the world are having to anchor off the coasts of Shenzhen and Hong Kong for as long as 16 days, as port workers frantically work to try and get things back on track. 


“The temporary closures issued on the port, along with the staff shortages incurred as officials try to keep on top of COVID numbers, have had such a huge impact, and it definitely won’t be an easy fix. One attempt to combat the problem has been the movement of excess cargo to other surrounding ports, but when you consider that Yantian port handles around 13 million containers every year, that’s a lot of excess cargo to be distributed to other ports, which will most likely already be at capacity. 


“Whilst it would be ideal to see the issues in China rectified as soon as possible, with the impact it has caused to freight delays and the massive increase we’ve seen in international shipping costs, unfortunately I cannot see this being a short-term issue. I can only imagine this is the beginning of a particularly difficult period for global trade, and I do think these increased costs and delays are likely to be with us well into next year. 


“Obviously, the troubles at Yantian port aren’t the only issues currently facing global trade. At the moment, there are several other major concerns – Brexit, the UK HGV driver shortage, and the ongoing pandemic being amongst them. When speaking with our logistics provider only recently, we were informed that UK ports are currently operating at around 25% below capacity, as they’ve not managed to implement new systems yet, and this, coupled with all of the other complications, makes for very difficult trading conditions. 


“Our message to our customers at this moment is not to panic. Whilst there isn’t much we can do about the issues currently facing international logistics and global supply chains, we have had the foresight to try and acquire a stock of over 150 popular machine models, in an effort to try and reduce waiting times. This has meant that our lead times have only been affected by approximately 3 weeks, which is substantially lower than some of our competitors, who are currently quoting around 16 weeks for delivery. 


“At the moment, we’re making every effort to keep things running smoothly, keeping in mind that this is a storm for us, not a hurricane. We’re keeping an eye on the developments overseas and constantly reviewing and evaluating the market to try and keep up to pace and, hopefully, ahead of the game.” 


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