Industry Update July 2024

Welcome to our July industry update:

General Update:

We are mid peak season, facing the usual challenges such as last-minute bookings and resource availability. However, July 2024 has introduced some new issues for us to navigate.

Technology: plays a significant role in our daily operations, and we were reminded of this when both Microsoft and CrowdStrike experienced issues in mid-July. Whilst both outages occurred around the same time, the disruption was mainly attributed to Microsoft. The impact was widespread, affecting all industries including the global freight industry. Airlines faced delays and backlogs due to cancellations and disruptions of flights; Lufthansa described the situation as dynamic; KLM noted a “significant impact”. Even though the seaports were less affected there were still disruptions, as Felixstowe and Tilbury reported difficulties in landside operations.

Related articles:

Airlines say cargo operations 'severely affected' by outage - The Loadstar

Ports hit by Microsoft outage as supply chain operators fear a rerun of NotPetya - The Loadstar

Ripples from IT outage could spread through supply chains 'for weeks' - The Loadstar

Shipping companies impacted around the world by Microsoft outage - Splash247

It is important for our industry to understand how a “news item” can impact our ability to serve our clients. Being aware of these effects enables us to manage expectations.

Congestion: The port of Kaohsiung in Taiwan is currently experiencing congestion; this situation is a result of operators omitting from their schedules congested ports such as Singapore and Port Klang and instead are diverting containers to ports such as Kaohsiung. This need to divert is a knock-on effect from the Red Sea issues of disrupted schedules and displacement.

Related articles:

Kaohsiung the latest victim of Asia's container congestion contagion - The Loadstar

China shippers opting for containers by rail as volumes hit monthly record - The Loadstar

Israel and Houthis trade blows as Red Sea shipping crisis enters new phase - Splash247

More danger to box ships as Houthis expand Red Sea attack arena - The Loadstar

Extreme weather blocks vessel traffic around South Africa - FreightWaves

Freight increases: The trend of rising rates continues to persist, with some routes, particularly out of Asia experiencing significant cost increases. According to an article in Logistics Management. rates on certain lanes have surged to levels four times higher than those seen before the pandemic. This upward trajectory has been reinforced by recent rate hikes that took effect in July.

Related article: Ocean container rates increase up to four times higher than pre-pandemic levels - Logistics Management (logisticsmgmt.com)

Panama Canal: In August transits will increase to 35 per day and from September this will increase again, to 36. Consistently strong rains means that the canal is heading toward full operational capacity, at its maximum the canal can handle 40 transits per day.

Hungary: The recent update from our valued partner NSEW to FEDEMAC highlights new legislation that tightens the rules on duty-free entry for import shipments into Hungary from outside the EU. Under these stricter regulations:

1. Primary Residence Requirement: The assignee must convincingly demonstrate that their primary residence will be in Hungary. This involves proving the intent to establish a primary domicile in the country, rather than just a temporary stay.
2. Enhanced Scrutiny by Customs Authorities: Customs will adopt a more rigorous approach to verify the true intention behind the claimed transfer of primary residence. This means that authorities will closely examine the circumstances and evidence provided by the assignee.
3. Demand for Extensive Documentation: To support the clearance process, there will be a significant increase in the amount and type of documentation required. This could include proof of employment, housing contracts, or other relevant documents. The nature of these documents may be unpredictable and unprecedented, posing challenges for assignees, especially if some documents are packed in their shipments and not readily accessible.

These changes may increase costs, complicate the customs clearance process and require thorough preparation and documentation from those relocating to Hungary.

Insurance / General average: “The law of general average is a principle of maritime law whereby all stakeholders in a sea venture proportionately share any losses resulting from a voluntary sacrifice of part of the ship or cargo to save the whole in an emergency”.

A Splash article reporting on the General average declared on Maersk Frankfurt highlights that insurance cover is crucial not only for move-related damages but also for exceptional scenarios like general average. By implementing the Bolster Insurance digital tool we have simplified the insurance valuation process, reducing the risk of clients unknowingly underinsuring or opting out of insurance due to a complicated process. By streamlining the process, we help ensure that clients are adequately protected against all potential risks including exceptional scenarios.

News from Voerman Group Locations:

Eurohome & Voerman, CZ – In our June update, we informed you about changes to restrictions that now allow citizens from nine approved countries to work in Czechia without the need for work permits or employment cards. While this is a positive development, a recent Expats.cz article highlighted that Czechia is considered one of the most challenging countries in the world for expats to settle in. In response, local authorities have acknowledged this issue and plan to introduce a Foreigner Integration Program in 2025 (for more information, we have linked the articles below).

Beyond the integration program, local support is crucial and our Eurohome team are ready to offer a warm "Worldwide Welcome" to your clients. With local knowledge and a deep understanding of the importance of personal connections, our team can provide tailored programs and be the friendly voice on the phone or email. For inquiries, please reach out to Lucie & Jakub at prague@eurohome-relocation.com.

Related articles:

Prague announces multi-million-crown campaign to help foreigners integrate - Prague, Czech Republic (expats.cz)

Czechia is one of world's hardest places to settle in as an expat

Asian Mobility Services – Asian Mobility Services had a busy July, highlighted by two significant achievements. The team successfully obtained their immigration license status for Singapore and celebrated the opening of their new Singapore warehouse facility on July 1st. The facility became fully operational under the experienced leadership of Steven Quek, who brings nearly four decades of expertise in the international removals industry. The team is eager to extend a warm "Worldwide Welcome" to everyone. Feel free to reach out to them for assistance!

Rate and Survey Request: rates@asianmobilityservices.com

Our commitment: As always, our move management teams will continue to work proactively with the families moving and our corporate contacts and to provide excellent service. We will continue to review and improve our processes to achieve cost efficiencies without impacting the quality of service.

Your commitment: In this peak season period, we continue to ask our clients and partners to provide us with new initiations as early as possible. It is important to continue to work in this way as this will assist us to understand and meet the needs of the transferee and the transit time requirements, also to set realistic expectations at the beginning of the relocation journey. If you have any questions, please reach out to your account manager or customer services contact.

Steps we are taking:

• Managing expectations and being flexible is vital
• Pre-advising that freight charges may increase
• Pre-advising that storage at origin may be required due to equipment availability
• Pre-advising that congestion at ports will result in port charges
• Out of the box thinking is required, such as considering alternative routes / ports etc – this may increase costs but improve transit times

Proactive communication: As always communication remains key and whilst it is difficult to predict all the developments and consequences in the global freight market, we remain actively involved in industry associations on all continents to ensure that we are prepared to serve our clients in the current market conditions. The combined effort of our supply chain and logistics teams along with The Harmony Relocation Network and our industry associations allows us to continue to expand operating capabilities.

We will continue to keep you updated and please reach out on any questions.

Pauline Collins – Supply Chain Manager