Market Update 19th March 2021

Shipping and supplies continue to be highly challenging into Q2.

In 2021, Manila to Felixstowe shipping times has averaged 73 days, Southampton 59 days, Stockholm up to 69 days and Hamburg 41 days for shipments.

Much is this is down to port congestion around the world, especially in the UK – this was headline news recently, but the issue has not gone away; we are seeing ships at anchor for weeks at a time waiting to get a berth to unload.

These issues have several causes – COVID, Brexit and import/export imbalances. COVID and Brexit issues should get better over time; however, the imbalances will take a lot longer to begin to balance out.

Delays are just one part of the current challenge – container availability and shipping costs are still a significant issue

The current shipping rates are up to seven times higher than 12 months ago, with many companies delaying shipments hoping that prices would drop back to more acceptable levels after the Chinese New Year – this has not happened. Container rates are going down, but not significantly; the Drewry’s composite World Container index decreased just 1.7% last week.

Production in the Philippines continues at the same rates as previous months – we are hearing of localised shortages of raw materials that are causing production breaks; this means that delays are still running at least two months and not liable to catch up for the foreseeable future.

 We have heard of spot prices for desiccated of over $4,000, which is a record high, with availability at a record low.

There are no backup stores available from UK or EU suppliers, as everyone plays catchup from 2020.

Right now it’s a very tough marketplace, we recommend people get orders in as soon as they can to avoid being without later in the year, as we don’t think things are going to improve in the short or medium term.

Call us to discuss.