Industry Updates – Peak Season 2021May 26, 2021
Arpin International Group would like to share important industry updates that will impact the cost and movement of household goods and personal effects during the remainder of 2021.
- Lumber, packing material, paper, and box prices continue to increase: The price of lumber, packing material, paper and boxes continue to increase, directly impacting costs for domestic and international household goods shipments. The most significant increase has been to lumber prices, which according to several sources, has quadrupled year-over-year.
This lumber shortage has not only had a direct impact on overall costs, but also the availability and timeliness with which suppliers can obtain lift vans and construct crates. The average wait time in the U.S. for new lift vans is approximately three to five weeks, which may cause delays in shipping and increase (already extended) transit times. The continued demand and U.S. buying power of lumber is the most significant factor supporting price increases. Despite efforts of sawmills to boost output, it is unlikely to be sufficient in meeting those demands for the remainder of 2021.
- Supply chain challenges: Container freight rates continue to climb with no end in sight. Record demand for air cargo space and containers, lack of equipment, and scheduling disruptions for marine vessels are expected to continue throughout the summer.
The lengthy, worldwide port delays currently being experienced are a major contributing factor to the increased charges. With vessels stalling offshore for days or weeks while in transit due to port congestion, and most vessels calling multiple ports per sailing, each individual delay has a ripple effect on the entire network, preventing ocean carriers from meeting their next rotational assignment. The outcome is a missed (slide) sailing – the result of multiple vessel delays resulting in one or more planned sailings being cancelled to realign the schedules.
Consequently, ocean freight bookings, especially from APAC and Middle East Regions to the U.S. and the U.K. are extremely difficult to obtain, and pricing cannot be fixed. Moreover, pricing is expected to continue to increase, with no material change on the supply and demand side for the foreseeable future.
- Labor shortages at California ports: Extreme congestion continues to plague the Ports of Los Angeles and Long Beach, affecting the timely importation of household goods and personal effects shipments. Vessels are currently waiting an average of eight days at anchor, with labor shortages being the primary constraint. Once at port, large vessels are being limited to four gangs, resulting in extending port stays by three to four days. Vessels attempting to offload at the port of Oakland are experiencing wait times of up to three weeks.
Consequently, we are advising customers with shipments moving during the 2021 busy season to prepare for delays as well as additional port storage, demurrage, import congestion surcharges, and various other charges that may be assessed.
Your Arpin service team is working diligently with its supply chain partners to add capacity in key geographic areas where possible. We will continue to keep you well advised on any change to freight costs, booking possibilities, etc. If you have a specific question, please reach out to your Arpin International Group representative for detailed information.