Causes and Impacts of COVID-19 Shipping and Freight Delays

Causes and Impacts of COVID-19 Shipping and Freight Delays Featured Image

The COVID-19 pandemic has been the catalyst for disruption to daily life across the world. After more than 18 months, many industries are still struggling to recover from multiple lockdowns and supply chain issues. This unfortunately includes the international and Australian shipping and freight industries which have struggled with unprecedented disruptions and a soaring increase in demand.

What is going on?

Due to the disruptions brought on by the COVID-19 pandemic, we are now faced with increased delays and cost for shipping and freight transportation. These disruptions have affected all industries reliant on shipping and freight, including construction, removals and retail.

What is causing these delays?

Delays have been created by two major factors; supply chain issues and increased demand.

Supply chain issues

Port Blockages and Closures

Just like the rest of the world in March 2020, the shipping and freight industry ground to a halt and went into lockdown due to the spread of COVID-19. After resuming operations, ports across the globe were frantically trying to address an increasing backlog and keep up with growing demand. Cases of COVID-19 within ports have continued to be an issue for the global supply chain as the infectious nature of the virus requires ports to cease operations and staff to commence quarantine immediately following outbreaks and exposure.

Closures unrelated to COVID-19 have also occurred. The shipping and freight industry suffered another setback when the Suez Canal, a major trade route, was obstructed for over a week. The blockage was due to one of the largest container ships in the world, the Ever Given, being blown off course and becoming stuck within the walls of the canal. The obstruction was estimated to have held up approximately $US9.6 billion of goods each day it remained blocked and the incident further contributed to delays across the world.

The busiest port complex in the United States is experiencing a bottleneck due to increased demand and a shortage of trucks to pick up the unloaded cargo. Los Angeles and Long Beach port have been experiencing severe congestion with the last week of September seeing approximately 80 ships waiting to dock. Disastrous weather has added to the COVID-19 delays, with major Chinese ports suspending operations following Typhoon Chantu.


Labour Shortage

The COVID-19 lockdowns in early 2020 saw the shipping and freight industry massively reduce manufacturing and shipping capacity which further resulted in cuts to staff. This initial displacement of workers has now caused a labour shortage which is adding to the pressure on shipping companies and increasing delays.

The Maritime Union of Australia is striking at Port Botany, following more than 18 months of negotiating working conditions with container terminal operator, Patrick Terminals. The Union has issued notice that workers will be striking each Monday, Wednesday and Friday of October. These strikes will likely increase the existing delays.

Shipping Container Shortage

With the supply chain stretched to maximum capacity, shipping and freight are now experiencing a container shortage. As overseas shipping and freight companies have reduced the frequency of their routes to Australia, this has resulted in limited circulation of shipping containers. This scarcity has driven up the price of containers considerably. With current containers shipping at capacity and the industry facing an equipment shortage, this is contributing to the existing freight delays.

Soaring Demand

Initially, the COVID-19 pandemic resulted in a drop in consumer spending. However, we have recently seen demand skyrocket with retailers and suppliers struggling to keep up. The shipping gridlock remains as demand continues to grow and pile up on the existing backlog.

What are the impacts of these delays?

Price Inflation

The astronomical spike in shipping and freight costs are the result of the current bottlenecks experienced by the industry. The ABC reported that the cost of shipping on the China to Europe route has risen over 500% since June 2020. Retailers and suppliers may soon pass these costs onto the consumer with the price of imported goods expected to rise.

Increased Waiting Times

The delays across shipping and freight have seen increased wait times for consumers. Increased port congestion and limited shipping routes have significantly boosted waiting times for containers ready to ship. These waiting times are expected to further increase around late November and early December as demand further surges in response to the holiday season.

What can consumers do?

Account for increased waiting times

When it comes to organising your items to be shipped using freight, we’d recommend being prepared for increased waiting times. Allowing a generous window of time for your items to arrive can prevent potential inconvenience and account for any added delays.

Consider other options

If time is of the essence, you can consider transporting your items via an alternative method such as air freight. We would recommend shipping small and essential items using air and Allied currently offers multiple services including excess baggage. However, please be mindful that shipping via air is more expensive than sea freight.

Although many Australian states and territories have closed their borders due to COVID-19 outbreaks, shipping and freight is considered an essential service. The domestic network is currently not impacted by the global delays so moving locally and interstate with Allied is as efficient and easy as pre-Coronavirus.

Be patient

Unfortunately, there is not much a consumer can do in response to the shipping and freight delays. Readjusting your expectations for the cost and lead time of shipping your items is recommended.

We understand that the delays are frustrating for our customers. Practising patience with Allied and our team is appreciated. As the international removals industry depends on the freight companies, we have limited control over the current delays as they may be required to prioritise essential items such as medical supplies and perishables. However, please rest assured that we are working tirelessly to make your international move as efficient and streamlined as possible. You can contact our team to stay abreast of any developments or further delays.

Are you planning to move locally or internationally soon? Don’t let these delays dissuade you. Whether it be for domestic reasons or a business relocation, we can make your move as easy and efficient as possible. If you have any further questions about how the COVID-19 delays may affect your move, then please get in touch with our friendly team.