Freight Status Advisory

26 February 2021

The advent of COVID-19 has disrupted our way of life and global supply chains have not been spared. Despite the welcome in vaccine development and strides towards a return to normalcy, logistics and shipping are still to fully recover from the effects of the pandemic. Shippers have had to bear turbulent market conditions including skyrocketing freight rates, reduced availability of space and equipment on container ships, as well as port congestion. All this in addition to the existing challenges of documentation infrastructure constraints, and adverse weather elements. To the extent possible, UNFPA has endeavoured to manage the costs associated with these challenges however, as with all supply chain costs, freight-related costs eventually impact the final cost of the product. Not only has there been an unprecedented escalation of transportation rates, but the unpredictable schedules and delays have resulted in increased lead times and limited cargo visibility.  

UNFPA has taken action to ensure that it mitigates the logistics risks associated with ‘our new reality’. This includes enhancing collaboration with our existing pool of freight forwarders to ensure timely and economic cargo delivery. This has been complemented by the streamlining of our business processes to enhance value in our logistics operations through the establishment of a dedicated freight and shipping unit. 

Inasmuch as the overall situation seems to be slightly improving, the ripple effects from the chaos of the previous months continue to affect shippers and customers. Vessel schedule reliability for ocean cargo remains historically low. On a positive note, there are indications that the airfreight market can return to pre-pandemic levels volume-wise by the end of Q1 2021. The distribution of COVID-19 vaccines is still gearing up but is yet to affect the airfreight cargo industry in the massive manner that was predicted a few months back.

We kindly request for your forbearance and understanding of the freight costs as well as extended lead times during these unprecedented times of tremendous complexity. As mentioned in the UNFPA Service Conditions, from time to time, you may be called upon to allocate more funds to cater for the increased freight costs as a result of the chaos in the global shipping industry. UNFPA remains committed to making use of every means possible to extend the best value to you from our network of expert freight suppliers.

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