Global supply chain disruption is changing cargo flows coming into Britain and smaller ports such as Liverpool are benefiting as suppliers look for other ways to route cargoes and minimise disruptions, Liverpool port’s operator said.
Major bottlenecks have formed across the globe in recent months due to a surge in demand for retail goods from people stuck at home under pandemic-related lockdowns and logjams impacting the supply of container ships and boxes to transport cargo.
A shortage of truckers has added to difficulties especially in Britain, which also faces logistics pressures after leaving the European Union as border checks are now required at EU ports.
Container lines have used megaships of some 19,000-20,000 TEUs (20-foot equivalent units), the size of four football fields, to haul consumer goods across the world. But the logjams have meant such vessels have been stuck waiting to load or discharge.
In recent weeks top shipping lines including Maersk (MAERSKb.CO) and MSC have omitted some UK port calls including Felixstowe in eastern England and diverted cargo onboard bigger ships to European ports to be re-routed onto smaller vessels and “transshipped” back to Britain.
“We are seeing the benefit of these cargoes being transshipped into Europe,” said Mark Whitworth, chief executive of Peel Ports, which operates Liverpool port.
Whitworth added that smaller 1,500 TEU container ships sailing from China had been calling at Liverpool in recent months to speed up deliveries, something that was previously not “economically viable” due to the scale needed and costs involved.
Container freight rates have risen to record levels this year providing shipping lines with their best earnings in years.
Situated in the northwest of England, Liverpool’s deep water port has become a bigger hub for the north of the country avoiding congestion at southern gateways and national driver shortages, which has cut journey time for goods.
“The net consequence of this change is those boxes (containers) are landing closer to their end destination now,” Whitworth told Reuters.
“That gives them (container lines) options of using multiple ports.”
Whitworth said Liverpool was expected to volumes of 1 million TEUs for the first time in 2021, versus 750,000 TEUs handled in 2020.
Peel Ports, which is the UK’s second largest port operator handling nearly 70 million tonnes of cargo annually and has other terminals, was planning “for at least one more year” of global supply chain disruptions, Whitworth said.