Covid-19 Delivery – How Covid-19 Impacted Shipping Costs and Reliability
The pandemic that defined 2020 has had far-reaching consequences on all aspects of business and life. When Covid-19 hit, shops shut and the world came to a standstill, however now retail is predominantly online, businesses are back, and shipping companies are playing catch up. News stories about missed Christmas deliveries, Felixstowe Port congestion and skyrocketing shipment fees are commonly seen. Indeed, The Department of Transport are receiving pleas from UK logistics businesses looking to better manage and reinstate trust in overseas freight.
This blog outlines the effects of coronavirus on shipping and how 2021 and beyond may be shaped by this once in a century event.
Shipping Impacts 2020
Though Covid-19 has been an influential factor in shipping distrust, delays and high costs, additional factors impacting shipping exist; seasonal rushes and Brexit.
Seasonal Rushes
Christmas is always a busy time of year for shipping, with shops keen to keep shelves stocked, presents being shipped around the world, and businesses getting supplies where possible. But Christmas 2020 is more havoc than usual, with delays and price hikes resulting in unreliable shipping.
Even pandemic PPE imports can be blamed for Christmas shipping mayhem, as this stock can’t be removed from ports, thus causing bottlenecks.
Brexit
The Brexit transition period ends 31st December, likely meaning the end of flexible and cheaper trade deals between the UK and the EU. While discussions are underway to finalise trade deals, businesses are scrambling to stockpile goods. The fear and uncertainty of a no-deal Brexit is causing unprecedented amounts of shipments reaching the UK, unfortunately without the capabilities for immediate unloading.
How Covid-19 Impacted Shipping
The above touches on key impacts of Covid-19 on shipping, however the below gives further detail.
Freight Delays
Initially, shipping demands were unpredictable. Many businesses ceased shipments but soon returned to business as usual, also having to make up for demand. Just as international freight somewhat managed to cope with various economies, demands and PPE shipping, for the UK particularly, Brexit and seasonal demand increased troubles.
Ships waiting to offload containers off-shore, a delay in the emptying of containers and the backlog of empty containers caused major disruptions at ports and delays only escalated from there. Where there is an abundance of empty shipping containers at UK ports, major ports around the world, such as in China, are suffering a shortage of empty containers to fill.
See more: The Ultimate Guide to Freight Forwarding
Increased Shipping Costs
The cost of shipping has increased due to Covid-19, by a lot. For example, before the pandemic, the shipment of a large 40ft container to the UK may have cost a couple of thousand pounds, however now it can cost up to £10,000.
Businesses are then left with two options when continuing imports; to either increase the price of products for consumers or take the hit as a business and operate at an unsustainable level. Businesses and consumers both take the hit for increased shipping prices.
Disrupted Supply Chain
The entire supply chain is disrupted by Covid-19’s impact on shipping, and it’s not just logistics companies suffering through not being able to reliably deliver products. Plenty of other industries are struggling too without constant and reliable shipping. Some car manufacturers, for example, are having to pause production in certain parts of the world due to delayed import of parts. Similarly, UK builders and construction workers need the import of building supplies to continue working on projects which are being slowed.
Influx of Complaints
Plenty of frustration is mounting from end-consumers and logistics companies alike due to Covid-19 and the impact on the shipping industry. This anger is resulting in a distrust of the shipping industry; many customers are viewing their logistics provider as unreliable, despite the fact most in the industry can do nothing. The combination of seasonal demands, Brexit stockpiling, Covid-19 delays, and even bad weather has put many logistics providers in an uncomfortable and trapped position of disappointing customers.
Calls for Transformation in 2021
Although the situation looks bleak for the shipping industry, the Department of Transport is being faced with calls to take action, however limited, from UK ports, logistics providers and sector organisations. In the short term, this action may involve more trains from ports, extension of ability to move containers outside of normal hours, or increased driver hours, to allow for more movement of containers to and from UK ports to reduce blockages.
It is the long-term consequences of these calls to action and spotlight on backlogs, however, that is of most interest to the UK shipping industry going forward. The importance of international trade deals and shipping efficiency has been highlighted significantly in 2020 due to Covid-19 and Brexit. Once the seasonal rush is managed and Brexit deals are decided, the shipping industry may see positive changes, especially regarding UK ports.
Even on a smaller scale, the unreliability of international imports has left UK businesses seeking supplies and resources within the UK. This trend of more regional sourcing and delivery may help bolster the financial standing of UK suppliers struggling to maintain overseas exports.
Learn More with Allegro Logistics
As logistics providers with over 60 years combined experience in shipping, deliveries and more, Allegro Logistics are well positioned to manage logistics for any sized UK business. From storage at our purpose built 30,000sq ft facilities just outside of Bristol, to reliable international air, sea and road freight services, we provide comprehensive logistics solutions to fit the requirements of any business. Our team of experts provide tailored services to each customer, ensuring transparency and honesty so our customers are never left in the dark.
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