What NEI Is Seeing
Things are picking up and there is an ongoing rebound from the pandemic as household goods booking numbers are pointing to a strong peak season. Movers are seeing 10 to 24 percent increases over 2020 with some reporting increases over 2019!
With that news, however, the following challenges are also being seen:
- Driver and labor shortages remain an acute household goods industry issue.
- Higher shipping costs have been sparked by a combination of global factors, including:
- Congested ports
- Soaring consumer demand for imported consumer goods
- Too few ships and truck drivers
Container xChange reported that the price of used containers in China has doubled since November. For example, the rate for a 40-foot container from Shanghai to Los Angeles hit $4,403 the first week of May – the highest in the Drewry World Container Index data going back to 2011.
Even cargo shippers on trans-Atlantic routes are feeling the sting: Rotterdam, Netherlands to New York surged to a record $3,500. According to Bloomberg, “What’s more, new contracts being signed by some of the biggest U.S. importers indicate the spike won’t be a short-term blip.”
What You Can Do
We recommend initiating moves as early as possible – booking a minimum of 30-days in advance is encouraged. Once a date is set, we recommend working to keep that date, as movers may take weeks to re-schedule due to peak demand and crew shortages. Also consider mid-month moves as such moves allow service partners to use top-driver teams for employee moves.
Companies need to continue to weigh the impact of rate increases and potential incremental costs of delayed shipments (e.g., temporary storage and temporary housing) against the increased stress delays placed on relocating employees who will have to wait for their goods much longer than expected.
If NEI is not managing your international shipments, we recommend:
- Budgeting for additional freight rates in your cost estimates.
- Working with partners to develop processes to include verification that freight increases are genuine.
- Questioning rate quotes that are much lower than what the overall market is reporting. This could be designed to lock in the business, only to be asked later for large increases without warning.
Be prepared for this trend to continue and consider reasonable policy changes going forward. This could include exceptions made specifically due to COVID-19’s continued disruption; setting new expectations with relocating employees; and alternative policy considerations for shipping international household goods.
Although companies that build international shipping containers are now at maximum production capacity, consumer pressure for imported goods might increase strains on container availability.
NEI continues to be diligent about client costs for every single move. Our Client Relations Managers will work with each client to discuss the most cost-effective international household goods shipping options available and considerations for possibly providing a relocating employee a small allowance towards being without those goods due to a longer transit.
If you would like to discuss policy changes or options to reduce delays or costs, please reach out to your NEI representative or Mollie Ivancic, NEI VP, International Services.