To our dear Smarteq partners and customers:
The end of 2021 and this first month of 2022 came with unforeseen challenges in the shipping and logistics industry for deliveries from Asia to Europe, with a remarkable impact in our already delayed delivery schedule.
Here is a short summary on the background of these challenges:
– Loading and ground handling workforce at the transit points getting sick and on leave at the same time the workload unproportionally increased due to higher demand resulted in recurrent delays in traditionally efficient EU points of transit: Hamburg, Rotterdam, Antverpen and Bremerhaven.
– Irregularity on the booking of available cargo slots due to workforce shortage has also made on-time booked shipments to be on haul at the loading point for over 2 weeks.
– Missed slots for unloading at the transit point forces shipments to wait for next available unloading slot, which can take from 1 day to 2 weeks, or more. Therefore, an announcement of delay with a new, re-scheduled delivery date can and has been delayed again several times.
– This same shortage of staff has left the communication chain by each delay at the carrier a no-priority task, leaving us -and you- with last-minute information on delays and unreliable new dates for re-scheduled deliveries.
– During the summer-crisis, rail transport mode was taken as the alternative by all industry, skyrocket-increasing the costs within a few weeks and making booked shipments wait over 3 weeks at loading and transit points.
– Sick leave at our own warehouse has forced us to re-schedule already delayed deliveries.
– Only transport mode unaffected is air freight, though with less routes and fewer carriers, orders booked with airfreight not always are shipped immediately after production is finished.
The information we have so far received from our logistics supplier indicate the following scenario for 2022:
Sea freight: We foresee same situation as above mentioned, with transit times between 12 and 14 weeks. Celebration of the Chinese New Year on early February will probably have an impact as well.
Air Freight: No major impact, except for the Chinese New Year celebration.
Rail freight: Expected to be the same long and delayed lead times as in Q4 2021, due to increasing demand, causing bottle necks in their fleet.
We should expect a more favorable transport situation due to reduced demand, given a higher inflation caused by reduced consumption; however, we recommend a conservative approach and keep counting with extended lead times for the rest of the year:
Sea freight: 10-12 weeks
Air freight: 2-7 days
Rail freight: 35-45 days
Higher vaccination rates and redundancy at the workforce may improve the delivery accuracy, though these factors remain outside Smarteq’s control.
Under the current freight and logistic circumstances for shipments in transit from Asia as summarized above, and to avoid the recent chain of delays we have been suffering, affecting our partners and customers, we recommend adding a wandering period of 1-3 weeks to the transit time for the delivery of orders of parts not in stock.
We foresee these same circumstances to be the case in the moment shipments for orders placed now and ahead will be released for freight. Hence, we encourage you sharing this information with your customer on a timely manner.
We are proactively working on active actions to improve the accuracy of our delivery chain and seeking for alternative paths for mitigating the impact of a recurrently delayed delivery schedule. We need to work closely and align efforts to manage these challenging times, together.
Some of these active actions are:
– Review our high runner stock, for a higher inventory of more parts even if not high-rotating ones.
– Allocate more resources for a closer follow up of the logistic chain throughout transit points
– Encourage our partners to forecast and foresee future demands even without committed orders
Your understanding and cooperation as a key partner to Smarteq is a corner stone in this process, which we highly appreciate and cherish. Please get in touch with your Smarteq Contact to go through this information and to answer any question or comment you may have on this or any other matter we can support you with.
Smarteq Wireless AB