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In recent months, COVID-19 has put incredible pressure on global supply chains. But it’s not just the pandemic that is causing unforeseen pressure on the UK supply chain. We have an ageing infrastructure, a chronic HGV driver shortage, record-high prices and record low space availability on sea freight options, new rules in trading with the EU, and in addition, a UK-wide shortage of warehousing capacity.

While we have had to stay at home, online shopping has peaked and an increasing amount of goods have been transported across the globe. According to UNCTAD, maritime logistics represents 90 percent of the world supply chain. Therefore, ports are an integral part of global trade.

Ensuring uninterrupted supply

The global freight market is under extreme pressure at the moment, and port congestion results in container vessel delays which might lead to demurrage charges for cargo owners. These are genuinely unprecedented times, requiring decision makers across a wide variety of sectors to think hard and think differently when it comes to ensuring uninterrupted supply throughout peak season and beyond.

A multi-modal approach can meet the client’s needs in the best way allowing them to react to change

A multi-modal approach can meet the client’s needs in the best way allowing them to react to change and automatically make amends to the plan, in accordance with the issues being faced. However, end-to-end supply chains rely on assets and you’re only as robust as the amount of ships and/or operators involved. The industry has faced many challenges with Brexit, Christmas, COVID-19 and the Suez Canal and although some can be seen as isolated incidents, they have happened and they will again.

Improving any breakdowns

It’s difficult to prepare for the unknown and when it might happen but I think operators have a great way of gathering the data following these events and use it to improve any breakdowns in the chain in preparation for if there’s a next time.

As a result of the pandemic, shipping companies took ships out of the sea due to reduced demand but it’s interesting that demand is now increasing and yet the numbers of ships back out at sea hasn’t increased alongside. The cost of using ships has rocketed - one customer importing from Japan used to pay £900 per container, now it’s £7,000 and even £14,000 from China.

Port-centric warehousing

We really need everyone working together to benefit all parties - it’s very one-sided at the moment

So, we’re seeing prices remaining high with fewer ships operating - what incentive do operators have to get more ships back out onto the water and get back to where they were, when their income is healthy with reduced numbers? We really need everyone working together to benefit all parties - it’s very one-sided at the moment but I understand that companies could be remaining cautious with a fast return to pre-COVID while the pandemic is still impacting life.

Looking ahead, I think autonomy is going to be huge and we’ll see the reliance on trained operatives being removed. Autonomous shipping is already being trialled and of course, the capabilities of drones is only going to improve in the future. Whilst there is no silver bullet for the combination of complex challenges we face, one suggested approach is to put port-centric warehousing at the heart of your UK distribution strategy.

National rail infrastructure

The port-centric model is very simple. Rather than transporting your goods hundreds of miles inland to primary distribution centres, the storage facilities are located close to, or within key ports. By doing so, you take costly, time-consuming links out of the supply chain, replacing them with seamless, simple solutions from ship to doorstep.

Another option to consider, which again takes links out of the supply chain, is to utilise the rail network within the port for onward transportation. We’re fortunate at Solent Gateway to offer a dedicated rail link which is connected to the national rail infrastructure and can provide a direct route for freight whilst reducing traffic on the roads. At Solent Gateway, we are committed to solving customers’ supply chain challenges and support businesses that seek facilitation of logistics hubs, business parks, storage, sea to rail, sea to road, automobile, project cargo, general cargo, dry bulk and break bulk.

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Backlogged ports among symptoms of global supply chain disruption
Backlogged ports among symptoms of global supply chain disruption

Backlogged ports, a shortage of shipping containers and not enough workers are among the factors contributing to supply chain disruptions that have led to shortages of various goods and are likely to impact availability of merchandise, during the upcoming holiday season. Demand is growing rapidly as the impacts of the COVID-19 global pandemic have diminished. However, lingering consequences of the pandemic are continuing to impact the container shipping market. With each element in the system tightly intertwined, any changes tend to ripple with additional repercussions. Slow circulatory movement of containers A direct upshot of the COVID-19 pandemic was to slow the circulatory movement of containers globally. To increase productivity and save time, some vessels began making their return journeys empty, in effect leaving more empty containers at the delivery destination and fewer at the source of shipments. The varied timing of the pandemic in Asia and the West compounded the problem At one point, Asian containers could not be sent back to Asia, because of COVID-19 restrictions in place. The varied timing of the pandemic in Asia and the West compounded the problem. With empty containers stacking up in the West and a shortage in the East, slower circulation of containers and higher demand have led to sharp increases in costs. Millions of TEU dry container units added A lack of new equipment is not the problem. Last year, the industry added about 2.8 million twenty-foot equivalent (TEU) units of dry containers, in line with the 10-year average. Congestion at ports has been going on for months and still continues. Recently, in the San Pedro Bay region, near the Port of Long Beach, in California, there were 144 ships, including 85 ships that were waiting to unload. In Savannah, Georgia, more than 20 container ships were waiting to dock. Ports in the US states of New Jersey, New York and Texas have also seen record backlogs. Majority of influential global ports face backlogs According to one report, 77% of the most influential ports in the world reported above-average wait times this year. The turn-around time for a container in ports has nearly doubled in 2021, in comparison to 2019. A worker shortage at the ports is aggravating the problem and container ships now carry about 30% more goods, which require more labour to unload. Ports are also doing the additional work with fewer people. There is also reduced labour productivity at warehouses and marine terminals. Investment in workforce training to counter bottlenecks Some port bosses expect the bottlenecks to last through the summer of 2022. To address the problem, some ports are investing in workforce training and scheduling night-time appointments to pick up goods. Although a lot of attention is focused on the ports, they are just one element in the troubled supply chain. Even if the ports could increase their capacity, downstream processes would also have to increase their labour force, to accommodate the higher volume. Difficult to absorb impact of global supply chain disruptions In the best of times, the global supply chain operates like a well-oiled machine In the best of times, the global supply chain operates like a well-oiled machine, despite its complexity and the inter-relatedness of various stakeholders. However, the sheer size of the system makes it difficult to absorb the impact of any disruptions. Turning the system around takes time, and a burgeoning global demand for goods, in the aftermath of a global pandemic, makes recovery even more difficult. The Biden Administration in the U.S. has established a Supply Chain Disruptions Task Force, to monitor and address short-term supply issues. This task force is convening meetings of stakeholders in industries with urgent supply-chain problems, such as construction and semiconductors, to identify the immediate bottlenecks, as well as potential solutions. Role of global supply chain more critical now There have been supply chain disruption and staff shortages in several countries, including the United Kingdom (UK), Germany and New Zealand, according to business surveys. As the economy recovered and demand increased, businesses have not yet been able to bring inventories fully back to pre-pandemic levels, causing inventory-to-sales ratios to fall. The role of the global supply chain has never been more critical.

How the maritime industry is working to lower carbon emissions
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Measures to reduce carbon emissions Binding across its 170 member states, IMO has adopted mandatory measures to reduce emissions of greenhouse gases under its pollution prevention treaty (MARPOL). The Energy Efficiency Design Index (EEDI) is mandatory for new ships, and the Ship Energy Efficiency Management Plan (SEEMP) is required for all ships. The Sustainable Shipping Initiative (SSI) is a multi-stakeholder initiative to improve the sustainability of the shipping industry in terms of social, environmental, and economic impacts. Founded in September 2010, SSI has 15 members spanning the shipping value chain, from charterers, shipowners and operators, to shipyards, banks, classification societies, and technology companies. Poseidon Principles Poseidon Principles are consistent with efforts of the IMO to reduce shipping’s total annual greenhouse gas emissions The Poseidon Principles establish a framework for banks and financial institutions to assess and disclose the climate alignment of ships to provide guidance and promote responsible environmental stewardship. The Poseidon Principles, signed by 20 financial institutions representing over $150 billion in loans to the shipping industry, are consistent with efforts of the IMO, seeking to reduce shipping’s total annual greenhouse gas emissions by at least half by 2050. Decarbonisation goals Some shipping companies are already setting individual decarbonisation goals beyond the IMO’s target, driven by their customers’ desire to reduce their global carbon footprint. The intensity of emissions has decreased somewhat in recent years because of larger ship sizes and slower traveling speeds. Interim solutions to lower carbon emissions include the use of liquefied natural gas (LNG) as a shipping fuel, which produces less carbon than the oil commonly used. LNG can also be less expensive but is not seen as a permanent solution because it still emits carbon. FuelEU Maritime initiative Global maritime technology networks promote the adoption of low-carbon technologies The European Commission has launched the FuelEU Maritime initiative, seeking to increase the use of sustainable alternative fuels in European shipping and ports. The European Union also seeks to include the shipping industry in a mandatory cap-and-trade carbon market, a so-called emissions trading scheme, as early as 2022. Also, the global maritime technology network (GMN), funded by the European Union, is a network of Maritime Technology Cooperation Centres (MTCCs) in Africa, Asia, the Caribbean, Latin America, and the Pacific. They seek to develop national maritime energy-efficiency policies, promote the adoption of low-carbon technologies and establish voluntary pilot data collection and reporting. Carbon Intensity Indicator (CII) ratings Scope ESG Analysis, a German credit rating, and analysis firm has launched a database to display Carbon Intensity Indicator (CII) ratings for the world’s commercial maritime fleet. Including 70,000 vessels, the Ship Review database provides transparency into each ship’s environmental, sustainability, and reliability/safety performance.  The CII rating system seeks to assist the maritime industry in reducing greenhouse gas emissions, measuring a ship’s operational efficiency in grams of CO2 emitted per deadweight tonnage and nautical miles travelled. Based on 2020 data, more than a third of the world’s fleet could fail to meet upcoming restrictions. GreenVoyage2050 Project The International Maritime Organisation is executing the GreenVoyage2050 Project through the Project Coordination Unit (PCU). The project seeks to help developing countries in their efforts to reduce greenhouse gas (GHG) emissions from ships. Longer-term fixes to lower greenhouse gases include a need for zero-carbon fuels and technologies Phase one of the project, signed with Norway in 2019, is currently underway. Phase one of the GreenVoyage2050 Project is scheduled to run until May 2022. Longer-term fixes to lower greenhouse gases include a need for zero-carbon fuels and technologies; however, they are not currently available at the size, scale, or price the industry needs for broad adoption. New fuels will need to be developed, along with new propulsion systems, upgraded vessels, and a new global refueling network. 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Cruise industry receives lifeline from Finnish pioneers in safety innovation race
Cruise industry receives lifeline from Finnish pioneers in safety innovation race

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