EU | UK news digest. 22 July
The UK is struggling with driver’s shortages, floods are causing delays, and freight rates are not going to decrease. If there is no perfect strategy to stay afloat, is there one to remain sane?
The weather in the northern Europe has definitely added up to challenges facing shippers and forwarders. Due to high water levels and flooded rail and road networks, delays are worsening for cargo owners. However, there is a glimpse of improvement – at least most Dutch waterways are expected to reopen in the next few days.
The UK government makes another attempt to tackle drivers’ shortage but it soon receives a wave of criticism. Authorities have proposed greater support for driver training schemes via apprenticeships and to increase the numbers of new HGV licenses. Although the measures have potential, the government has made an additional statement that has become a stumbling stone in the search of a solution – the prospect of issuing temporary visas to non-UK drivers that surely will take time, thus a possible short-term relief is out of reach for the time being.
Among other initiatives adopted by the UK recently is the decision of the Environment Audit Committee to examine how the shipping sector can best achieve net-zero carbon emissions. It will also look at options that may encourage international action to lower global emissions in shipping; the project will also look at the aviation sector. On the domestic level, it wants the aviation industry to reach net-zero emissions by 2040.
Foreign buyers have started canceling the shipments boarding from India due to container logjam. In the context of high rates and clogged ports, local small exporters have to fight for their customers. In search for solutions, the export body has requested the shipping lines to bring in more empty containers and has requested the Indian Railways to provide free movement of containers from gateway ports to hinterlands.
The area of the Indian Ocean stays in focus of such companies as CMA CGM that aims to strengthen its presence in the region. It has confirmed the start of the new service connecting Réunion, Madagascar, Comoros, and Mauritius. It will be complementary to the existing services and expand the network.
It is no doubt that increased freight rates have severely affected every aspect of the industry, thus experts have conducted research identifying whether current record-high sea freight rates are ‘pricing out’ low-value cargo from the market to a significant level. No increase in the average value of the cargo has been spotted; hence, the premise is based on a false assumption. However, the analysis does not provide any basis to claim that low-value cargo owners are not being squeezed out of the market. It is important to notice that the fact that low rates are unluckily to return has been widely accepted.
The railway continues to be one of the most flexible sectors with new developments and adjustments. The JadeWeserPort Wilhelmshaven freight village has welcomed its first direct container-laden train from the Chinese city of Hefei as part of its new position on the Belt and Road Initiative. Its main objective is to provide competitive and environmentally friendly transport alternatives between China and Europe. Meanwhile, Rail Baltica sets an ambitious target to integrate the Baltic region with the rest of Europe and opens the Kaunas Intermodal Terminal. Ukraine has completed a major project – the reconstruction of the track between stations, which connects the Chernobyl exclusion zone with the main railway network.
It has previously been mentioned that such players as COSCO have started to use its vessels for various purposes following the rates boom and capacity constraints. While the wind is blowing in that direction, Wan Hai is reconsidering Asia-Europe trades – it has ordered smaller containerships, and luckily, the economic situation is in favor of such a move.
Among ambitious companies is also 3PL Global Reach Logistics that has expanded into Europe with today’s announcement of two new warehouses, in The Netherlands and Poland. Additionally, there are plans to expand the company’s warehouse in California and the development of its online presence. DHL is not planning to lose its positions and is building a logistics center close to Frankfurt to support growth in demand for pharma logistics capacity and facilitate its influence in the industry as well as develop sustainable agenda. Lufthansa follows suit with the refurbishment of its main hub facilities at Frankfurt Airport amid to provide flexible and tailored solutions to the current situation.
