By Paula Hill, shipping manager, Winfibre
The haulage situation is the worst I have ever seen in my career.
For the past few years, the logistics industry has been warning of a lack of drivers and investment in training of drivers.
Driving often involves unsociable and long hours, takes people away from their families for days or even weeks at a time, and often involves bad accommodation in the cab and having to deal with poor toilet and showering facilities at service stations.
The trade association Logistics UK started warning a few years ago that there was a shortage of 50,000 drivers, then this became 60,000 and then 70,000.
On top of this, Brexit meant a shortage of European drivers, as those who used to come here don’t appear to be coming back because of the hassle.
Plus, Covid lockdowns meant reduction in testing capacity so new drivers were not able to take tests to fill in some of the gaps.
I can’t see any improvement for the rest of the year in haulage and if anything it might get worse.
Retailers are gearing up for Christmas and paying incentives to attract drivers to work for them. But by offering £1,000 to £1,500 for drivers to join them, they are simply picking off drivers from other parts of the economy rather than attracting new ones.
Container drivers are traditionally at the lower end of the pay scale, so any incentive to move to another sector – such as driving for a retailer is only likely to damage the container haulage industry further.
With shipping, the focus is on the lines getting containers back to Asia – China especially. At the moment, the lines can charge in excess of $15,000 to ship a container to Los Angeles, Hamburg or Felixstowe from China.
There have been years when shipping lines haven’t made any money and they have had a lot to contend with, so it is understandable they are looking to increase revenue while they can.
Currently, there is a lot of congestion around these key ports, which is holding things up, but this congestion is endemic on every trade line.
But shipping lines want to put vessels on the most profitable routes, so are taking vessels off less profitable routes such as Europe to South America and putting them on trans-Pacific routes.
Additionally, they are often seeing it as more profitable to send empty containers back to Asia, again China in particular, as there is more value in quickly turning them around to send goods back out again.
This is partly driven too by not enough containers to service demand. Even though shipping lines have been investing in more boxes, they can’t be manufactured quickly enough to meet the demand.
All of this has meant much higher costs with our shipping costs up somewhere between 40 to 50% in the past year.
It is also taking time for the shipping lines to get used to the fact that we no longer send material to China. It was a nice easy circle for them, where they shipped goods from China and sent recovered fibre, in our case, back to there.
While South East Asian ports are well serviced, it isn’t as simple as it once was for them, and getting containers to China is the priority – even if that means they go back only containing fresh air.
Due to these difficulties with haulage and shipping, we have had to spend a lot more time on planning. Relying on existing relationships with key carriers has also been important to keep material moving.
It is no longer the case that we need to give two to three days’ notice to book containers, but now it is more like two to three weeks.
There is also a 5-10% failure rate across collections, meaning collections are not happening when they are supposed to happen.
In normal times, it used to be the case that there was 95 to 97% capacity, and that left some capacity to cover these missed collections. Now with capacity at 100%, there is just no flexibility to go and pick up loads that have been missed for whatever reason. It can therefore take a lot of time to rearrange a collection.
I can’t see anything getting better in the short-term. It is more likely to get worse. We are coming up to winter when high winds, snow and other bad weather can close ports and container depots, disrupting shipping and haulage further.
The last few months have been really challenging, and unfortunately, it seems like it can only get worse in the coming months until the weather improves again in the Spring, and hopefully more drivers and more containers eases the pressure a bit.