Global Shipping & International Removals Conditions
THE MARKET:
Since our previous update, ocean-freight rate levels have dropped considerably on the majority of
export trades from the UK when compared with recent unprecedented high-rate levels. This is due
mainly to reduced global demand for shipping space currently experienced by the shipping lines,
caused by a combination of inflation, high interest rates and impact of the Ukraine war.
However, whilst reduced freight-rates certainly help to bring down the overall cost of an
international sea-freight move, welcomed by customers and movers alike, the many shipping-line
operational and service issues associated with the worldwide shipping market since the Pandemic
have not gone away.
The good news is, we can report current shipping-line acceptance of container bookings on most
outbound trades from the UK is steady, with vessel capacity and scheduled sailings available on
average subject to two-weeks’ notice.
We are however, concerned to report that shipping-lines are already applying operational
measures to adjust for these reduced freight rates. These measures can include cancelling an entire
vessel schedule forcing all bookings to a later vessel, cutting out selected destination ports-of-call,
‘slow-steaming’ to reduce vessel fuel consumption, which leads to longer than scheduled voyage
times, and last-minute arbitrary and without warning re-booking (of loaded) containers due to lack
of capacity, i.e., transferring from placing the loaded container onto the booked vessel, and rescheduling it for inclusion on the next (later) vessel departure.
Therefore, moving companies and customers alike, should be aware that advertised transit times
can be extended due to operational reasons, even after a vessel has departed. Shipping lines are
unlikely to offer any compensation for said delay.
These service issues are exacerbated on some trades because of a lack of import shipments arriving
at European and UK ports. This imbalance of trade is an additional challenge for the shipping-lines,
causing a shortage of empty sea-containers readily available for re-loading and export. In some
cases, this will impact a customers preferred moving date.
Ironically, on some trade lanes, freight-rates have fallen so far, that the shipping lines countermeasures are already leading to freight-rate increases. Despite this, some movers benefit from
negotiated annual freight contracts which smooths the impact and contributes some degree of
stability. We predict this uncertainty will gradually settle and stability will begin to return in the
coming months.
Ultimately, severe service challenges, short-notice changes to container bookings, and variable
freight rates, despite downward trends, will be reflected in your mover’s inter-continental
door-to-door quotation and terms.
MARKET AVAILABILITY
Many destination ports around the world are experiencing varying lack of container or ship
availability, leading to associated delays.
Eastbound trades from Europe (shipments to Asia, Oceania, India, Middle East). While acceptance
of bookings is currently good, these trades are the most likely affected by the aforementioned blank
sailings, and slow steaming. Customers should be aware that sea-container shipments may take
longer than expected to arrive through no fault of the Mover.
Westbound trades from Europe (USA, Canada, Dubai, and Australia): these routes remain
robust, acceptance should be good and ships ‘waiting time’ for unloading at most USA ports has
improved. However, high demand for container space is likely to be an issue during the peak season
summer months. Destination ports in the Pacific Northwest, such as Seattle, Portland, and
Vancouver, are still not being served on a direct ‘all water basis’, with alternative routes via ports
on the US East Coast, but expect delays because of intermittent congestion on the US rail networks
which carry the containers from East to West Coast.
Southbound trades from Europe (South, East, and West Africa): Where a shipping Line does offer
a service on a given route to this area, it is usually quite reliable. However, many hinterland
destinations (usually served via main ports with overland on-carriage to inland freight terminals)
have been removed from the Shipping Container schedules because of lengthy main port congestion and
or poor on-carrying transport infrastructure. This has caused a reduction of the main destination
ports of call coverage across much of this region, especially the Indian Ocean Islands.
UK HAULAGE
The shortage of UK HGV drivers continues to be a serious problem across the country, impacting all
industries including shipping. High demand combined with short supply is driving up container
haulage costs included in the mover’s quotation. Shipping Lines who control the container haulage
to and from the loading point and the port have recently introduced a Driver Retention Surcharge
(DRS) aimed at maintaining their pool of HGV drivers, who would otherwise leave. This driver
shortage, despite the DRS is causing some sea-container bookings to be cancelled at short notice.
This is a very common operational challenge for Movers and their customers, impossible to predict
when booking the container, and frankly, very little that can be done to protect Customers from
such inconvenience
CURRENCY EXCHANGE DIFFERENCES
Shipping Line’s container-freight rates and ancillary charges are usually quoted by them in foreign
currency, mainly US Dollars and Euros for sea-freight, and local destination currency for destination
port and on-carriage charges. These ‘freight charges’ are, however, payable in British Pounds (GBP)
and converted typically at time of the ships’ sailing date, applying the currency exchange rate at
that point in time. Movers generally will include these container-freight costs in their GBP
quotation offered to the customer using the indicative exchange rate(s) valid at the time of their
quotation. Customers should therefore expect an adjustment of the Mover’s final invoice versus
quotation, reflecting the actual exchange rate applied by the Shipping Line at time of despatch.
Your Mover has no control over the actual exchange rate used and applied by the Shipping
Line.
FUEL COST CHANGES
Sea Container freight contracts are subject to periodical ships fuel (bunkering) cost reviews. This is
a mechanism applied by Shipping Lines which compares the average price of bunkering quarter-onquarter and then adjusts the rate either up or down based on the change. With the well-publicised
energy supply issues, bunkering increases adding to the overall sea-container freight cost are highly
probable. We have seen increases as much as US Dollars 350 per container in recent examples.
PORT STRIKES
Our UK Ports have experienced labour and Border Force strikes over the past 6 months; while no
actions are currently scheduled that we are aware of, ongoing negotiation, particularly with UK
Border Force workers continues. Customers should be aware of the impact of potential future strike
actions which could cause unexpected delays both outbound (export) and inbound (import)
shipments, particularly the inbound UK customs clearance time and subsequent container
deliveries.
Shipping Lithium-Ion BATTERIES
The acceptance of ‘Li-ION’ batteries in household and personal effects shipments is a complicated
subject. There is a widely reported increased fire risk associated with these batteries. Shipping
Lines themselves are so far, inconsistent in standardising their rules for their inclusion or exclusion
from a consignment. Typically, we experience that Shipping Lines will decide on a shipment by
shipment basis whether Li-ION batteries can be included. This extends to all and any items which
may require such power units, examples include but not limited to cordless power tools, laptops,
e-scooters, e-bikes and similar.
We that Li-ION batteries are NOT shipped. If you do include them, the cargo will be
declared (legal requirement) as ‘Hazardous Cargo’. If accepted by the Shipping Line, hazardous
cargo will incur a substantial freight surcharge, driving up your cost of shipping. The rules for
hazardous cargo declarations is fastidious; it will also impact the time is takes to secure a confirmed
container space booking on a ship.
Non-declaration of Li-ION batteries (or other hazardous goods), whether by intent or in error, is
treated by the Shipping Line as a misdeclaration. This is a serious offence under maritime law and
would lead to a substantial fine (payable by the customer) (currently circa 30,000 US Dollars); in
addition, the Shipping Line could confiscate and dispose of the consignment.
