Shipping delays and costs

[Ketan SwaliParticipant @ketanswali79440]

At present we are regularly being asked why certain items are out of stock or why is there such a big delay in future availability.

Here are some observations of what is happening:

• Our last container from SIEG was shipped from Shanghai in November 2020. Instead of getting into Felixstowe within about a month, it took two months, after being offloaded in Malaysia, awaiting a transshipment vessel which had space to carry it. We finally received the container on Tuesday this week. Similar transit delays are effecting shipment from all our other suppliers.
• Sea Freight costs are now eye watering. Normally, one would pay around £2000 to £2500 for sea freight on a 40'ft container. Our last container cost us £4000.00
• SIEG is hoping to load our next container on Tuesday next week, that is if the container yard provides them with a 40'ft container… which as of today is difficult to get due to shortage of containers. If they manage to get the container, and if the container gets on a vessel this month on 29th January for which it is booked (fingers crossed), then the sea freight for this container will be £12,000 + various surcharges of around £1500.
• Chinese New Year is just around the corner in February, so more delays expected just before, during and just after.
• Due to extremely high sea freight costs, many companies have decided to delay shipments to late February, mid-March out of China. It is expected (shipping lines are saying) that shipping costs will start to reduce by then, and there is also hope that vessels returning to China will comeback with a lot more empty containers from Europe. Arc has decided to accept the short term 'big hit' to shipping costs, because of uncertainty over what will really happen.

ARC has already increased prices for machines and accessories by a small amount. However, at present it is difficult to know for sure how such mega increases will effect future product prices. Even if the sea freight costs come down in late February/March, the probability of them being anything like the past rates pre-October 2020, are low, at lest in the short term.

Ketan at ARC

[Ketan SwaliParticipant @ketanswali79440]

[Nick Clarke 3Participant @nickclarke3]

Ketan –

Your posts here are always friendly and yet at the same time totally professional.

While all of your present and future customers would prefer you to give your products away, seriously I think most of us would choose for prices to rise in along with your costs (and the need for you to make a living!) so that your business may thrive for many years to come!

When I returned to model engineering a couple of years ago all of my big purchases came from you – big to me, but small when compared to many others I suspect, but I still received superb service and advice, even when it was me making the mistakes.

You know your business and know what kind of hit you can take, but for all of us customers please make certain you are here in 1, 5 or even 10 years time.

Take care, and thank you

Nick

[Frances IoMParticipant @francesiom58905]

there was a large amount of publicity about a year ago to a regular ?weekly rail link between China + Europe/UK – has this not proved economic or have global politics intervened?

[Nick WheelerParticipant @nickwheeler]

Posted by Frances IoM on 21/01/2021 20:57:58:
there was a large amount of publicity about a year ago to a regular ?weekly rail link between China + Europe/UK – has this not proved economic or have global politics intervened?

When the largest ships hold 20,000 containers(according to Google) just how economic do you think shipping them by train will be?

[Brian OldfordParticipant @brianoldford70365]

Posted by Nicholas Wheeler 1 on 21/01/2021 21:33:36:

Posted by Frances IoM on 21/01/2021 20:57:58:
there was a large amount of publicity about a year ago to a regular ?weekly rail link between China + Europe/UK – has this not proved economic or have global politics intervened?

When the largest ships hold 20,000 containers(according to Google) just how economic do you think shipping them by train will be?

According to reports it's being looked at it very seriously.
Train & Railway Freight from China: A Complete Guide (chinaimportal.com)

 

Edited By Brian Oldford on 21/01/2021 21:45:00

[Peter Jones 20Participant @peterjones20]

I think Covid has also had a lot to do with shipping delays for anything that can't be sorted by robots. Even internal mailing systems are about 4~5 times longer than was normal 2 years ago.

I ordered some parts from Germany, contacted seller after a few weeks and was told things are taking 2~3 weeks inside the country where it used to be 2~3 days.

I've had parcels held up in local distribution centre for 12~20 days (and that's only about 4 miles away)

Side effects from Covid are wider ranging than most people realise.

Bulk shipping is still cheapest way to move large quantities of 'stuff' long distances,.

Diesel ship engines are the most fuel efficient in the world (above 38% compared to about 30% for normal petrol and a little over 10% for external combustion (steam engines)

Edited By Peter Jones 20 on 21/01/2021 21:48:17

[Ex contributorParticipant @mgnbuk]

there was a large amount of publicity about a year ago to a regular ?weekly rail link between China + Europe/UK – has this not proved economic or have global politics intervened?

Most of our raw material at work comes via sea freight from China & we are having similar delivery issues to Ketan. As I get regular e-mails promoting the rail service, I asked if that was viable answer for us – short answer no.

Longer answer was that costs were similar to airfreight & delivery times similar to sea freight – the worst of both worlds ! One of the delays was due to the lack of a fast connection from the German rail hub that the Chinese trains finish at not being available to the UK.

Containers being in the wrong place is an issue – apparantly Felixstowe had run out of space for empty containers & were not allowing them to be returned there.

Strange times.

Nigel B.

[Ady1Participant @ady1]

The china freight train idea fell down for the same reason as so many other border crossing train attempts

Different track gauges

Any mid-journey-transfer of cargo kills the efficiency of these things off

Going to be a few months to let things settle down, I've pretty much stopped getting anything until spring

[HopperParticipant @hopper]

Posted by Ketan Swali on 21/01/2021 19:29:28:,,,,

…Even if the sea freight costs come down in late February/March, the probability of them being anything like the past rates pre-October 2020, are low, at lest in the short term.

Ketan at ARC

Chinese companies may have to offshore their manufacturing operations closer to the end market to cut freight costs if this keeps up.

You might end up with a SEIG factory in Beeston.

[Neil WyattModerator @neilwyatt]

Posted by Hopper on 22/01/2021 02:35:52:

Posted by Ketan Swali on 21/01/2021 19:29:28:,,,,

…Even if the sea freight costs come down in late February/March, the probability of them being anything like the past rates pre-October 2020, are low, at lest in the short term.

Ketan at ARC

Chinese companies may have to offshore their manufacturing operations closer to the end market to cut freight costs if this keeps up.

You might end up with a SEIG factory in Beeston.

Many a true word spoken in jest…

[HopperParticipant @hopper]

Posted by Neil Wyatt on 22/01/2021 10:02:19:

Posted by Hopper on 22/01/2021 02:35:52:

Posted by Ketan Swali on 21/01/2021 19:29:28:,,,,

…Even if the sea freight costs come down in late February/March, the probability of them being anything like the past rates pre-October 2020, are low, at lest in the short term.

Ketan at ARC

 

Chinese companies may have to offshore their manufacturing operations closer to the end market to cut freight costs if this keeps up.

You might end up with a SEIG factory in Beeston.

Many a true word spoken in jest…

 

As an industry insider are you telling us something we don't know, yet?

The current model certainly is predicated on cheap shipping from one side of the world to the other as a normal thing. Can it last forever, regardless of Covid?

 

Edited By Hopper on 22/01/2021 10:25:28

[John HaineParticipant @johnhaine32865]

Sounds a great idea – railway across Asia to Europe, good reach say Germany, get unloaded for delivery and no hauliers will bring them to the UK because of import red tape.

[Ady1Participant @ady1]

Leaves on the line would mean it has to stop and unload in France

[Adam MaraParticipant @adammara]

We ordered a new machine in mid December from a UK company 'should be here before Christmas'. The machine was air freighted from Japan to the distributors in the Netherlands, that took 3 days. It arrived at our works last Wednesday, so about 3 weeks later! We are now struggling for raw materails, most are imported by our suppliers in the UK, usually taking 3 days, now at least 12 days. Its really sad that hardly any of our machinery or materials we use are actually made in the UK.

[Howard LewisParticipant @howardlewis46836]

Again, Thank You to Ketan for explaining what happens and why.

It may be painful in various ways, but at least the cause are known.

Howard

[Ketan SwaliParticipant @ketanswali79440]

It has been an interesting week as far as sea shipments as well as couriers are concerned.

Tracking down where six different sea consignments are in transit, all in various states of delay. Average transit delays 30 days in addition to the expected schedule (about 30 days) in normal times!

For courier shipments into Europe, seven consignments to various destinations stuck in France with DPD since the 6th of January, awaiting further movement due to backlog. Switched over to DHL road service into Europe, all moving smoothly to their destinations …. so far.

Considered the rail route last month for imports from China. Scheduled transit by rail into Europe was around 20 to 25 days. There after, no guarantees by road hauliers from Europe into U.K., plus average £3,500.00 extra freight cost on top of whatever sea freight costs would be. Rail transit therefore even more expensive. So abandoned that idea.

Good news… SIEG managed to get an empty container this morning from the container yard, which they will load and deliver to the shipping line by Tuesday next week… hopefully. Then hopefully the container will be on a vessel currently scheduled to leave Shanghai by end of this month… fingers crossed.

Bad news… just announced… Shanghai starting to go into lock down. Stay at home policy in place (excluding factory workers), and if you are working in Shanghai and if your original home town is elsewhere – different city, you can't go back home for the Chinese New Year (CNY). This brings on new challenges. Certain employees will disappear with/without notice in coming days, and those wanting to come back after CNY will go into isolation for a certain period of time, that is, if they are allowed to come back due to lock-down rules. Shanghai factories are considering working through the CNY, but how this will go down with the workforce is difficult to say.

Noted every ones comments with thanks. ARC is reasonably stocked for certain items for now, and the business is running okay through these interesting times.Thank you everyone for your concern and support.

Ketan at ARC.

[JimmieSParticipant @jimmies]

To add to the above, folk in Northern Ireland have an additional issue to deal with. Since Brexit, although in the UK, we remain part of the EU and now have a ‘border’ between us and the GB mainland which politicians refuse to admit. exists. This 'Irish Sea border’ means that most commercial goods entering NI from GB require a customs declaration. Although there is a three-month "grace period", several carriers have already stopped delivering here to avoid any hassle. I am told that this will be a particular issue for groupage distribution where each package will require separate documentation. One local haulier stated that he will need to employ ten additional staff to deal with the paperwork. Such is progress!

[JimmieSParticipant @jimmies]

To add to the above, folk in Northern Ireland have an additional issue to deal with. Since Brexit, although in the UK, we remain part of the EU and now have a ‘border’ between us and the GB mainland which politicians refuse to admit. exists. This 'Irish Sea border’ means that most commercial goods entering NI from GB require a customs declaration. Although there is a three-month "grace period", several carriers have already stopped delivering here to avoid any hassle. I am told that this will be a particular issue for groupage distribution where each package will require separate documentation. One local haulier stated that he will need to employ ten additional staff to deal with the paperwork. Such is progress!

[Frances IoMParticipant @francesiom58905]

Digging the UK out of the economic black hole caused by Brexit, Covid and Climate change (witness the massive increase in flooding year by year) is going to push the quality of life for most to the levels not that far above basic subsistence – Northern Ireland at least has a get out card by agreeing to a border referendum.

[Douglas JohnstonParticipant @douglasjohnston98463]

I feel sorry for those people who are just getting started with a workshop. I think we are now past the heyday in terms of cost and availability. Perhaps things will improve but I for one am glad I have all the machines I will ever need (well perhaps not entirely! )

Doug

[Nick Clarke 3Participant @nickclarke3]

Posted by Douglas Johnston on 22/01/2021 14:17:32:

I feel sorry for those people who are just getting started with a workshop. I think we are now past the heyday in terms of cost and availability. Perhaps things will improve but I for one am glad I have all the machines I will ever need (well perhaps not entirely! )

Doug

Shame on you Doug – and if you ever let SWMBO know you are in trouble forever!

[JimmieSParticipant @jimmies]

Re: border poll – if and when it happens no matter what the result, does not change the current situation which is a real shambles.

[KWILParticipant @kwil]

Border Referendum? .

No hard border? I see the Guarda have road blocks checking car registration and red/green diesel use.

[Ketan SwaliParticipant @ketanswali79440]

Posted by JimmieS on 22/01/2021 13:42:18:

To add to the above, folk in Northern Ireland have an additional issue to deal with. Since Brexit, although in the UK, we remain part of the EU and now have a ‘border’ between us and the GB mainland which politicians refuse to admit. exists. This 'Irish Sea border’ means that most commercial goods entering NI from GB require a customs declaration. Although there is a three-month "grace period", several carriers have already stopped delivering here to avoid any hassle. I am told that this will be a particular issue for groupage distribution where each package will require separate documentation. One local haulier stated that he will need to employ ten additional staff to deal with the paperwork. Such is progress!

Hi JimmieS,

I had to double check before commenting on this.

So far, having used Royal Mail, DPD road and DHL Road services into Northern Ireland, we have found movement to be as usual, subject to U.K. VAT rules, without requiring any special documentation, as long as goods are destined to be used in Northern Ireland. Parcels are getting through without any headache so far. We also have a small pallet consignment going to a business in Northern Ireland next week, for goods to be used by them for their business activity in Northern Ireland. So far, we have not been asked for any special documentation/paperwork or costs other than what we normally pay.

Perhaps the problems start for movement from Northern Ireland to Ireland?

Ketan at ARC

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