Connector Series - October 2020

With the numerous events of change and disruption to container shipping services from New Zealand in recent weeks we would like to provide you with some summarized information on the operational challenges liner shipping is facing.

The industrial actions in Australia had a tremendous effect with heavy congestion and a massive backlog of containers in Australian ports. In early October there were said to be 40 container ships waiting off the Australian coast and close to 90,000 containers held up on Australian wharves. There are multi-week delays at the ports and these delays heavily affect services which also call New Zealand. As of last week, one of the major Sydney Terminal Operators was estimating it would take 12 weeks to clear their backlog.
After steep demand drops due to COVID19, volumes increased dramatically to very high levels with stocks being replenished. Shipping lines and ports must adapt quickly to the fast-changing capacity demands while COVID19 restrictions impact the required planning, labour availability and productivity.
Terminal automation at the Ports of Auckland had to be interrupted due to COVID19 which created a situation of a terminal split into automated and manual areas, slowing operations considerably. The set-up of automation now rolls into the import peak season causing the Port to defer further roll out until March 2021.
Further, the fatality at the Ports of Auckland in late August stopped work entirely for some time and had a substantial and ongoing effect on the workforce - a backlog in the midst of peak volumes was a consequence. The numerous actions taken to improve the situation take time as they require extra labour and training.
Eventually, not only New Zealand and Australian ports are currently facing congestion and backlogs. Also, two of Asia’s main transhipment hubs, Singapore and Tanjung Pelepas, face disruptions in their operations which result in some heavy delays to the final destinations, e.g. to Thailand, India or Saudi Arabia.

Due to the above factors, in addition to weather conditions, draught restrictions and other numerous parameters affecting ship and port operations, schedules have to be changed, berth windows are impossible to be maintained and last-minute changes have to be made to accommodate vessels into port as best as possible. This has brought about various changes to rotations and cut-off times.

The number and scope of events adversely affecting ship and ports operations is unprecedented and has undesired and at times frustrating impact on the whole supply chain, your planning, operations and workforce. And given the dimension in which operations are affected, we must advise you that the situation for container shipping will most probably remain challenging for still some time.

While Bearing360, just as our partner shipping lines and ports, only have limited options to improve the situation due to the nature of the disruptive events, we would like to re-assure you that our teams and service providers are working tirelessly on solutions to provide you the best possible customer service in order to keep the impact on your operations as limited as possible.