Special feature

Global crises: Managing the ‘perfect storm’

Seldom have international movers had to deal with such a combination of crises as those that are rocking the global supply chain at the same time. Andrew Bennett hears perspectives from EU-based FIDI Affiliates and logistics membership associations who have been affected by the ‘perfect storm’ in logistics

On the global shipping crisis: Gavin Simmonds, Commercial Policy, Director, UK Chamber of Shipping

If you have disruption at Long Beach port or Felixstowe, that has an impact on the distribution of containers, and you have a problem in the global supply chain. Things are not moving fluidly.’

Representing more than 180 members across the maritime sector, the Chamber of Shipping is the voice of the shipping industry. The organisation does not think Brexit has caused widespread global supply chain issues, but agrees the business situation is very unpredictable.

‘At the moment, we have lines of trade out of balance,’ says Gavin Simmonds, Commercial Policy Director. ‘Different players in global supply chains are trying to adjust to abnormal volumes and traffic flows, and manage the tail end of the COVID-19 pandemic.

‘Countries in the Far East behave quite differently to the pandemic depending on their administrative capabilities. For instance, in China, the evidence is that they are using an “on/off” switch approach, which means… trade is coming in short bursts.’

As well as the lack of availability of sea containers, ports that become increasingly full mean ‘diminishing efficiencies’, and shipping lines may avoid them and route services elsewhere.

In terms of managing the crises, Simmonds says logistics operations require ‘careful planning’.

‘Check with your shipping agent whether they can guarantee the cargo movement; how much data they can give you about problems in supply chain before you commit to a contract.’

On general disruption in transport: Sarah Laouadi, Head of International Policy, Logistics UK

Maritime transport, globally, is really challenging in terms of rates, capacity and quality of service.’

Logistics UK (formerly the Freight Transport Association) is one the UK’s biggest business groups. It represents members across all areas of logistics, including road, rail, sea and air industries, buyers of freight services, and some moving companies. The UK depends heavily on sea freight and trading relationships with partners across its waterways, including in the EU. Brexit has had an impact across Europe, but there has not been ‘total chaos’, according to Sarah Laouadi, Head of International Policy at the organisation.

‘We didn’t experience total chaos, even at the beginning of January (when the first transition period ended). Partly, this is because of lower volumes, also because… logistics businesses delivered an incredible effort to get ready as much as possible. We’re still in an intermediary period (in terms of transition).’

While there has been a lack of gridlock at ports, ‘pain points’ and slowing of the supply chain have been caused by Brexit, including at depots, with companies facing additional costs.

Another problem being felt acutely is a shortage of HGV (heavy goods vehicle) drivers. COVID-19 has delayed driving tests, creating a backlog, and many EU-based drivers left the UK after Brexit.

The economic recovery following the peak of COVID has created its own problems. Demand for goods has rocketed in global economies, but ‘we don’t see sufficient capacity in the ocean freight market to absorb and respond to this demand’, Laouadi says.

In terms of helping companies weather the logistics storm, Logistics UK is making its views known to government decision-makers in the UK and the EU. On a practical level, and where feasible, movers are advised to plan shipping to avoid ports that are experiencing the worst delays.

On Brexit: Rob Gilbert, CEO, Oman Beverly-Smyth, Ireland

‘Quite a lot to overcome to be able to supply the market with services.’

The description of a ‘perfect storm’ affecting movers within the supply chain is one that applies well to Ireland. The Irish Republic faces unique challenges with its location on the edge of the EU and Eurozone, the proximity of Northern Ireland – which is part of the UK, but remains within the EU single market – and bureaucratic problems caused by Brexit.

Despite the ‘debacles’ in the supply chain, ‘we can still do our job when we have… the resources in place to wrap, pack and get the survey done,’ says Rob Gilbert, CEO of Oman Beverly-Smyth, and President of FIDI Ireland.

Challenges become significant with external factors, such as when leaving Ireland by ferry, container ship or plane. Since the end of the Brexit transition period in January, Irish customs clearance transactions have increased massively, with transactions up from one million in 2019 to around 30 million. Most arise from trips to or from the UK.

As a result, customs authorities are under pressure to clear consignments and get them away from ports. Ireland has limited capacity, with three main roll-on, roll-off terminals and four container ports.

Combined with challenges in booking container ship passages and shortages of heavy goods vehicle drivers to remove containers from ports, delays have been caused – and the ‘ultimate cost is borne by the customer’.

Sadly, moving companies have suffered reputational damage, as some customers have blamed them for factors beyond their control.

While the pandemic, today, presents less of a challenge than a year ago, COVID working protocols will remain for some time. ‘Hybrid home and office working is here to stay,’ says Gilbert. ‘We have embraced it. Our people… are very productive. But our moving crews clearly can’t work from home.’

While the problem may be more acute in the UK, recruiting drivers in Ireland is no longer easy – nor is attracting younger staff into certain roles. ‘Experience in this market is becoming a premium,’ adds Gilbert.

On disruption at ports: Laura Busettini, Vinelli & Scotto international movers, Italy

‘Be transparent, and pre-plan as much as you can.’

Movers providing international services into and out of Italy face challenges ranging from a lack of predictable service from the shipping lines, headaches over the availability of shipping containers, port strikes, and additional bureaucracy imposed by the Italian government. Vinelli & Scotto is no exception.

‘It is a very difficult time – I can’t remember anything like it,’ says Laura Busettini, who is Vice President of FIDI Italy.

Not only can it be difficult to make bookings with shipping lines – sea freight is facing its own problems – but movers are challenged by not knowing whether containers will be available.

Vinelli & Scotto now loads containers at a customer’s residence, then brings them back to their warehouse when they have a container and shipping transit booked. This provides more flexibility, but puts pressure on storage.

From October, government officials introduced the compulsory Green Pass. This is a certificate that shows the COVID-19 status of all Italian workers in public and private sectors – around 23 million people. Green Passes certify the holder as having been vaccinated against, recently recovered from, or recently tested negative for COVID-19. As well as ensuring that its employees have valid passes, companies are required to check that their suppliers are certified, too.

Port workers in Trieste and Genoa, and other locations around the country, were planning indefinite protests – blocking both ports from 15 October – to pressurise the government to reverse its decision to make the Green Pass mandatory for all workers.

Although Brexit has not caused significant additional problems for Vinelli & Scotto, the cost of booking ocean freight has been a factor. ‘Corporate clients understand, but the private customer is finding the increases difficult,’ said Busettini.

In terms of managing the crises, she advises movers to communicate clearly. ‘We try to be open and transparent with customers. It is very important to set expectations. Try to pre-plan as much as you can in terms of bookings. Be very proactive.’

Lead picture by Andre Furtado from Pexels

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