Thanks to a combination of Covid-19, Brexit and inclement weather, the logistics industry is currently in the middle of an extremely challenging period, with potential delays at every step of the route from pick-up point to destination.
To make things even more complicated, Chinese New Year is just around the corner, and historically this has caused further disruption to road haulage providers. The holiday lasts for up to fifteen days and causes a slowing of production and shipping of goods made in the region while the country celebrates, affecting supply chains in the UK.
In less frenetic times the impact of the festival, which takes place on February 12th this year, could be mitigated somewhat by early planning – but with everything else going on at the moment, this process is more complex than usual.
Although many factories will ramp up their production rates prior to Chinese New Year, the unique global circumstances we find ourselves in at the moment mean you can expect numerous changes:
The increase in freight will cause delays at ports, so it is very likely that you will need to advise customers of lengthened delivery times even before the festival officially begins.
With container space at a premium due to this increase in volume, you can also expect prices to rise – and with airlines and freight companies prioritising the most profitable shipments, you could even see lower-value cargo bookings cancelled.
Covid and Brexit have, of course, had their own effects on the logistics industry, presenting endless new challenges that create additional strain. The UK’s national lockdown has led to an increase in demand for many items from a population who are stuck indoors, while Brexit is already causing mayhem at the country’s ports, with lorry tailbacks caused by lengthy customs checks.
One consequence of the demand for goods growing during the national lockdown was a sudden shortage of containers to hold them in. With shipping containers used to transport the vast majority of manufactured goods worldwide, the congestion at ports has led to containers being out of circulation leading to a shortage – and this shortage has led to those that are available increasing in cost by up to 700%. The pandemic has also caused a shortage in available drivers to transport cargo, causing further disruption.
The various delays in supply lines have another knock-on effect for the food and medical industries. As you may have seen recently with regard to the Covid-19 vaccine, some goods must be transported below a certain temperature in order to avoid wastage.
Temperature-controlled containers are more expensive than standard units, adding extra cost to deliveries, while manufacturers of the units are struggling to keep up with demand, potentially creating an additional delay.
A perfect storm of contributing factors has created one of the most difficult periods the logistics industry has ever faced. Many companies will have prepared for the impact of Brexit and anticipated the issues caused by Chinese New Year by pre-emptively increasing their stock – but this surge is likely to be offset by fewer deliveries in the coming months, causing further strain on the transport industry in the UK.
Meanwhile, the combined effects of Covid, Brexit and Chinese New Year will inevitably lead to long delays throughout the supply line from Chinese factories to UK companies via ports and aeroplanes.