The COVID 19 Pandemic has seen a sharp increase in the cost of international shipping and therefore moving overseas. Whilst a variety of factors have contributed to this trend, the most significant causes are congestions at major ports, labour shortages, and imbalances in the demand and supply of containers.
The international shipping crisis has been caused by a perfect storm of multiple long Covid-19 preventative lockdowns, labour shortages and disruptions to both demand and supply. The lockdown measures put in place to stop the spread of Covid-19 have impacted factories, ports and airports around the world, with restrictions on travel and global stay at home orders. As a result of the slowdown in international moving and travel, global shipment companies reduced their productivity levels as demand for their services and the availability of staff slowed.
However, as vaccination rates increased and countries started emerging from strict lockdown restrictions there was a sudden surge in demand for consumer goods, desks, PC’s, household furnishing etc, as workforces started working from home. The surge in demand for container space on vessels could not be matched by the available supply. An increase in consumer spending driven by government stimulus packages saw the level of goods consumption grow rapidly, with production in factories increasing to match the growing demand. This was all met with the issue that the recent decline in goods production meant the inventory available wasn’t enough to meet demand quotas, and a market imbalance due to the backlog in productivity started to grow.
At the same time, there has been an increase in demand for certain goods such as medical supplies and personal protective equipment. This has put even more pressure on the already strained shipping industry.
One of the most significant factors is congestion at ports. This has been caused by a number of things, including staff shortages and an increase in the number of ships trying to dock at the same time. This has led to delays in ships being unloaded, which has, in turn, led to a decrease in the amount of space available for new shipments. This decrease in space has put upward pressure on prices.
As a result, prices for international moving have soared, and many overseas movers have been forced to evaluate the timeline of their move or look for other options to relocate their household goods. A container now spends 20% more time in the system for a typical door-to-door trade transaction, and ships, trailers and containers are stuck in congested ports.
Australia is further disadvantaged in this situation as its comparatively remote location puts it outside of the main shipping lanes. Flinders Port Holdings reports that 80 per cent of shipments to Australia are arriving outside the scheduled window, mostly thanks to bottlenecks in nearby ports in New Zealand, Southeast Asia, and China. Additionally, increased shipping capacity has been deployed to the strongest demand routes of Asia – North America and Asia – Europe.
Freight rates around the world have increased as much 10 fold from pre-pandemic levels. particularly due to operational costs such as fuel, new build containers and congestion costs at port all rising, however additional costs are driven by delays at port and container storage. Prices of a standard 40-foot container on main global routes have skyrocketed from $1,000 USD to more than $10,000 USD. Rates from Australia have not increased at that level, but the outlook for reductions in rates looks bleak.
The costs of importing to Australia have risen 450% compared to this time last year, with extending delays continuing and capacity being reduced as carriers divert vessels to the trans-Pacific routes servicing the US, which are proving to be more lucrative. What’s more, tight container capacity and port congestion mean that longer-term rates set in contracts between carriers and shippers are running an estimated 200% higher than a year ago, signalling elevated prices for the foreseeable future.
International shipping delays have become a growing global issue in recent months, as prices of moving overseas continue to rise and the availability of container ships are not able to match shipping demands. 70% of vessels are currently running behind schedule compared to less than 30% pre-pandemic. Many people who are moving internationally have experienced significant delays in the delivery of their belongings. In some cases, shipments have been delayed for weeks or even months. The cause of these delays can be extremely frustrating for those who are trying to move to a new country.
If you are planning an international move, it is important to be aware of the potential for shipping delays. You should allow extra time for your shipment to arrive, and be prepared to make alternative arrangements if necessary. With a little planning, you can minimize the impact of shipping delays on your international move. Contact us today to organise your move overseas.