To all customers, partners and agents:
The reason for this news post and letter is to draw your attention to the current market situation for East Bound services from Sweden to the Far East, IBPS and Middle East markets. Listed below are some of the main reasons for the current difficulty in securing export shipments from Sweden. This current situation is causing unique and extreme disturbances in our ability to quote and ship cargo in a normal manner.
The effect of the below circumstances is that in general all carriers are now refusing to take on any further bookings for the month of March and several carriers are even having booking stops for April. Some space on container vessels is first available on the month of May but these are quickly being booked for exports that were already planned for March and April. Some carriers are still offering rates for these periods, but the rates are high and space can not be guaranteed – space will be granted only if extra allocation is gained or if bookings are cancelled by other Shippers.
This now means that we are forced to work on an “ad hoc” basis where firm schedules and final rates can only be given if and when we have a booking on hand and are given time to examine many possibilities. Offers provided for general requests are based on underlying carrier rates but are as always quoted “subject to space and equipment availability” and may therefore need to be adjusted if the underlying carriers don’t accept the bookings. We realize that this causes difficulties for our clients, but we have no choice but to operate in this way as long as the current situation prevails.
The main reason for this situation is the acute shortage of space and equipment explained by several combined factors, including:
- An ongoing strike in Sweden’s largest container port Gothenburg. This strike has been off and on since Q4 2016 and with this port handling 60% of the volumes from Sweden, all Swedish ports are now feeling the effects since Shippers have chosen alternative ports from which to send their cargo.
- Several blank sailings by the main carriers and alliances as a delayed effect of the Chinese New Year (beginning of February). Coupled with high West Bound rates leading to carriers moving empty units to the Far East, these two factors have now resulted in extremely low equipment availability.
- Three new large shipping line Alliances starting up 1st April: The Alliance, Ocean Alliance and MMH. Almost all major carriers are part of one of these new constellations and there are many uncertainties as to space allocations and rate structures here, resulting in an inability/unwillingness to take bookings in advance.
- For a short time bad weather recently affected berthing in some of the ports in Germany and Holland causing larger ocean vessels to omit callings and call instead in an adjusted rotation. This also caused delays, congestion and some cargoes missing planned connections leading to a back log of containers in the ports and further pressure for booked volumes on later scheduled vessels.
We very much regret the impact this development is now having on our ability to act efficiently and in a the regular manner we are used to. Our belief though is that the situation will stabilize on the operational side ahead of Q3 when more tonnage is planned from the carriers, greater access to equipment is expected and the new alliances should be more settled in.
For the time being we appreciate your patience and assure you that we will do our upmost to keep the disturbances to a minimum and to work for the best solutions available.
We will keep you informed of the developments in this matter.
Chief Operating Officer
Global Freight Solutions AB