Global shipping delays, particularly in the Port of Singapore, are pushing out shipping schedules and resulting in significant delays which could start to impact Christmas shipments.

Ongoing rerouting away from the Red Sea is resulting in significant bottlenecks in Singapore, which have been exacerbated by increased demand from US buyers ahead of the introduction of China trade tariffs, as well as container shortages and bad weather in some areas.

While delays at the world’s second largest Port is having an impact globally, Australia and in particular Western Australia stand to be significantly impacted. Unfortunately, geography dictates that almost all freight heading to Fremantle must come via Singapore.

What we’re seeing currently is that shipments are either being held up in Singapore or coming to Fremantle via the east coast of Australia in an attempt to bypass the bottleneck, which can add another three to four weeks travel time. Neither situation is ideal.

We’re strongly encouraging clients to look at their calendars and order well ahead, whether that’s spare parts for machinery for harvest or retail goods for seasonal events later in the year like Halloween or Christmas.

Basically, if you’re going to need it before the end of the year, we strongly suggest ordering sooner rather than later. We’re following our own advice and doing exactly that, ordering our Christmas goods now, because we can already see the delays coming down the line.

While the delays are frustrating, there are other broader implications:

  • Price hikes: Freight rates are already increasing on US and Europe routes, which is likely to start putting pressure on the price of goods. Australian exports, particularly to US and European markets are also seeing freight rates increase.
  • Inflationary pressures: At a time when Australia is watching the inflation rate closely, flow-on price rises as a result of increased freight rates could potentially add to inflationary pressures.
  • Vessel bunching: Fremantle Port is experiencing a flow on effect of Singaporean delays in the form of vessel bunching, where a number of ships arrive in a short time period, causing delays in unloading and landside transportation.
  • Increased delays at peak season: ‘Peak season’ for ocean shipping usually begins around August, as demand starts to increase ahead of Christmas. Some in the industry are suggesting peak season has begun early this year, particularly on US and European trade lanes, which could potentially mean increased delays for Australia during the ‘traditional’ peak periods. 

With no quick fix to the current congestion and no timeframe on when delays will start to ease, both businesses and consumers need to plan ahead to avoid being caught out.

The current economic climate means businesses either can’t afford to hold large volumes of stock or they simply don’t want to because of uncertainty around consumer confidence. This means many businesses are currently relying on placing orders so that stock arrives ‘just in time’, but you need to be factoring in weeks of extra time when placing orders.

People outside the industry might laugh when we say start thinking about placing your Christmas orders now, but if you leave it another month or two, you might not be laughing at the end of the year if your shipment hasn’t arrived in time.

Brian Hack is managing director at EES Shipping.