Europe Will Continue to see Congestion, as Import Volume Will Increase and be Met with Peak Season
It’s not just the U.S., or Asia, or others that have been seeing congestion. Europe has been seeing congestion as well, and that is set to continue.
Import volume will continue to increase as it’s met by peak season, the “lockdown-delaying effect” in Shanghai, and strikes.
Congestion, Congestion, Congestion
Northern hubs in Europe have been quite congested and are projected to expect little relief throughout the summer as the lockdown of Shanghai has been slowly lifting. After the summer, lots of uncertainties remain on what the remainder of the year will look like in terms of congestion.
As all Shanghai factories have re-opened since June 1, Sigrid Hesselink, a spokesperson for the Port of Rotterdam, anticipates Europe’s busiest container will see a spike in volume starting in the middle of June.
Vessel transit times is another factor in the continuance of pressure on supply chains throughout Europe. Hesselink mentioned that the average transit time for containers on the Asia-North Europe trade have increased from 45 days pre-pandemic (2019) to 123 days in 2022. In addition to equipment shortages and capacity, which have caused boxes to pile up in ports, the Journal of Commerce (JOC) noted.
Worker strikes have also been a source of congestion at the ports, as last Thursday workers at the Port of Hamburg (Europe’s third-largest container port), followed through on their threat of a strike. The striking workers have also impacted the German ports of Emden, Bremen, Bremerhaven and Wilhelmshaven, Freight Waves reported.
As of now, the strike still looms of German ports and terminals. German port employers and the union representing the dockworkers do have plans on holding another round of negotiations. They say is an effort to hold off a potentially crippling strikes, this comes after talks have shut down during the weekend, the JOC reports. Furthermore, it is not immediately clear when the new talks would be scheduled.
Peak season is alive and well this year, but a little different than last year when things were ‘less normalized’ in 2020 and 2021, than what they are this year.
“Due to a combination of the lockdown-delaying effect (which has created an accumulation of cargo heading to Europe), plus the Christmas rush that is approaching because everyone is going to be shopping ‘in advance’ in order to have their Christmas items in shops in time,” she told the JOC.
Many companies in Europe have been building up their inventories in order to be prepared for potential lengthy delays outside ports, handling delays throughout the way, as well as delays in the onward movement of containers via feeder, barge, rail, and road connections, they say. In addition, some companies are concerned about not having the right commodities in their inventories or having too much of the wrong commodity.
Congestion this summer will continue throughout Europe and the rest of the world, as import volumes continue to rise. Uncertainties will remain post-summer where forecasts and projections are not secure on what will or will not happen the remainder of the year.
Additionally, we touched base on this topic in our monthly webinar yesterday. You can watch the webinar here for more information regarding this topic, as well as other current updates in the industry.
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