Supply chains face new challenges
2024 January, 16
Here are some important insights from our TLC Head of Sales Andrius Valentinas:
- Longer journey times around Africa mean delays of approximately 7-10 days, affecting not only deliveries but also the shipment of goods from Asia. European ports are gearing up for delays, adjusting schedules to optimize resources.
- We are observing an increase in container freight rates, although we said last December that they were likely to remain at the same level in 2024, but due to the unforeseen dramatic events that have occurred, the changes are evident.
- Due to the precedent set in the Suez Canal, clients received unexpected surcharges from shipping lines back in December. For example: a client paid ~ USD 2 000/4 500 for the carriage of one standard container and the shipping line added an additional USD 200-450 container surcharge on top of this price. But the point is that from now on there will be no extra charges from the shipping lines, as this is already included in the new freight charges.
- It is important that the Chinese New Year is approaching and will be closed from 09.02.2024 to 19.02.2024, which means that producers or sellers of goods will be looking for the supply chain to remain intact during that period, and will therefore buy more goods before the deadline, which is an additional opportunity for the shipping lines to increase prices of the sea freights.
- The ripple effect of the disruption ultimately translates into increased prices of final products, highlighting the interconnected nature of global supply chains.
In conclusion, the situation regarding container freight prices remains uncertain and the advice to clients is to be prepared for a bigger budget than planned for 2023 and to have patience while waiting for it.