UK Port of Felixstowe to have high volumes into New Year as demand surge continues

New York — High freight volumes are expected to continue into the New Year at the UK's largest container port, Felixstowe, because of strong demand due to stockpiling in anticipation of the UK's departure from the EU and equipment shortages across major exporting ports in Asia.

According to Platts analysis of port data, the port is currently working at below previous year's levels. Analysis of weekly container volumes through the port shows that the number of containers moved was 2.07% lower in the week ending Dec. 6 compared to the five-year weekly average.

Staff shortages throughout this year have led to increased waiting times for vessels. This has been compounded by the need for importers to restock following the easing of lockdown restrictions, meaning the situation has become increasingly worrying for both shippers and carriers.

These delays have been a major contributing factor to the recent surge in container rates as carriers charge a premium for the costs incurred due to the delays. The Platts assessed North Asia-to-UK rate has more than doubled in the past month to $5,600 per forty-foot equivalent unit, and sources have said a further rate increase is expected on Dec. 14. "Nobody wants to go to the UK anymore, so the headaches are starting," a freight forwarder said.

In the third and fourth quarters, a shortage of empty containers in key exporting hubs in Asia and a delay in the return of containers to quayside in the US and Europe has led to equipment shortages in key exporting regions. To combat this, carriers are striving to complete their head haul voyages quickly to reposition the empty containers sometimes at the expense of back haul freight.

Port delays at Felixstowe have meant containers have been diverted to ports on the North Continent. "We are starting to see bottlenecks emerge in Hamburg and Rotterdam as carriers dump cargo there," the same freight forwarder said.

For shipowners still unloading freight at Felixstowe and other UK ports, a congestion surcharge is now being enforced on top of the pre-agreed transport rate. According to CMA CGM, this has been introduced to supplement a significant increase in operational costs. Since Nov. 15 Hapag-Lloyd are currently charging $175 a twenty-foot equivalent unit for all cargo from Asia passing through Felixstowe.

According to the operational update published by the Port of Felixstowe, a contributing factor to the delays has been "a high number of slow-moving containers of PPE occupying storage space" ordered by the government sat at the port waiting to be distributed. A government spokesperson said, "in late October there were almost 7,000 boxes at the port." The number of containers has now reduced significantly and in their statement the Port of Felixstowe announced that all of them should be cleared this week.

In a bid to ease delays, in the same update the port announced the recruitment of 104 additional equipment drivers and the opening of both container terminals on Sundays for road collections and deliveries.

Businesses are stockpiling due to the continuing uncertainty surrounding the UK's future trading relationship with the EU. This coupled with seasonal increases in imports in the run-up to Christmas has led to a surge in containers heading to UK ports. Felixstowe has borne the brunt of this surge.