The headline comes as no surprise for those of you who are importing products into the UK from China. The ocean supply chain is at capacity and there is currently no lull in ocean bookings out of China.
Significant importers, such as Honda announced this week that they have to halt production at their plant in Swindon due to transportation issues at container ports around the UK. They operate on a "just-in-time" approach, which is designed to create efficiencies and helps avoid stockpiling. However, when there are serious transportation delays, it has a large impact on the supply chain leading to a temporary halt in production.
If you operate on a "just-in-time" approach it is worth noting that these challenges are going to remain until at least March 2021. Advanced forecasting will be essential over the coming weeks and months.
The Council of Supply Chain Management Professionals (CSCMP) in their State of Logistics report in June said: “The pendulum that once swung toward ultra-efficient, single-source, just-in-time and heavily cost-focused supply chains will swing back in favour of flexibility and reserve capacity to cope with uncertainty and risk.”
The ongoing congestion at UK ports, has meant that the Ocean Alliance, made up of CMA-CGM, APL, Cosco and Evergreen, is reportedly looking to review options for UK arrivals throughout January.
Similarly, 2M partners Maersk and MSC have decided to swap Felixstowe for Liverpool on their TA2/NEUATL2 transatlantic loop from the end of the year, with the intention to “provide stability to the service”.
The reason behind these changes are the supply chain bottlenecks, which include:
- Acute lack of container availability
- No space on the vessels
- Congestion at UK ports, in particular Felixstowe and Southampton
- Shortage of hauliers in the UK
The cause of these bottlenecks include high import volumes, the approaching Brexit deadline and peak season preparations, as well as a lack of storage space and yard congestion.
In another blow for importers, the haulage market is under immense pressure, with vehicle availability becoming more difficult with up to 2 weeks lead time.
To get your 2021 supply chain off to a more positive start, forecasting is of essence. Should you need any assistance, WTA UK is more than happy to assist. Contact us today.